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Here's Why Intercontinental Exchange, CME Group, and CBOE Global Markets Fell on Thursday

By Matthew Frankel, CFP® - Updated Mar 12, 2020 at 9:49PM

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The financial sector continues to get crushed in the market downturn, and the exchanges were hit especially hard.

What happened

The stock market had its worst percentage decline in more than three decades on Thursday, with both the Dow Jones Industrial Average and the benchmark S&P 500 index ending the day down nearly 10%.

And just like we've seen during the rest of the sell-off, the financial sector was one of the worst-performing parts of the market. The exchange operators were no exception -- Intercontinental Exchange (ICE -1.96%), CME Group (CME -1.58%) and Cboe Global Markets (CBOE -0.40%) were all down by about 12% in Thursday's plunge.

View down Wall Street at sunrise.

Image source: Getty Images.

So what

Over the past 1 1/2 days, we've started to see the coronavirus outbreak start to seriously threaten the operations of the major exchanges. It was reported in The Wall Street Journal that the New York Stock Exchange (a subsidiary of Intercontinental Exchange) was preparing for the possibility of closing its trading floor.

The other two already have made the decisions to suspend in-person trading. CME Group announced on Wednesday evening that it will suspend in-person trading on its Chicago trading floor beginning Friday at the close of business, and Cboe Global Markets followed with a similar announcement on Thursday.

Now what

To be clear, electronic trading will still be available on the two futures exchanges, and if the NYSE does decide to shut its trading floor, its business would be conducted electronically, as well. While it's unclear how much actual revenue (if any) these companies could lose from a prolonged trading-floor closure, this certainly represents a major escalation in the steps taken to deal with the outbreak.

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Stocks Mentioned

Intercontinental Exchange, Inc. Stock Quote
Intercontinental Exchange, Inc.
$96.75 (-1.96%) $-1.93
CME Group Inc. Stock Quote
CME Group Inc.
$206.12 (-1.58%) $-3.32
Cboe Global Markets, Inc. Stock Quote
Cboe Global Markets, Inc.
$114.07 (-0.40%) $0.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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