
Tech market sell-off deepens amid fears over US inflation and AI debt
Chip makers and tech investors such as Samsung and SoftBank plunge as global investors fret over potential interest rate hikes
An accelerating sell-off of AI-linked shares has hit global markets, as fears over rising inflation and future interest rate hikes spooked traders already wary of the heavily indebted sector.
South KoreaâÂÂs benchmark Kospi 200 index, which is heavily skewed towards the companies that make memory chips, fell more than 8% overnight to a six-month closing low, triggering circuit breakers that brought trading to a halt at various points.
Some of those semiconductor stocks, such as SK Hynix and Samsung Electronics, plunged nearly 11% and 9.5%, respectively. The index closed at a six-month low, down 8.1%.
Meanwhile, JapanâÂÂs Nikkei 225 dropped by 4.9% on Thursday, after an 11% slump in memory chip maker Kioxia and a 10% drop in SoftBank, a big investor in ChatGPT owner OpenAI.
The falls followed a slide on Wall Street during the previous dayâÂÂs session, where the Nasdaq Composite fell by 1.9% and the S&P 500 dropped 1.1%, logging its worst performance since July.
The sell-off comes after US data showed stateside inflation jumped to a higher than expected 3.7% in September, marking the fastest increase in prices since the consumer price index (CPI) rate hit a three-year peak of 4.2% in May.
The figure has rattled investors who are now expecting fresh interest rate increases by the US Federal Reserve, with some punters pricing in another increase as soon as the end of the month.
âÂÂMarkets have just had an incredibly tumultuous 24 hours, as a strong US CPI print was then followed up with mounting fears around the AI trade,â Deutsche Bank analysts led by Jim Reid, said.
Worryingly, the figures showed this was not about fuel costs, which have been pushed up by geopolitical tensions including the ripple effects from the US war on Iran. Reid said: âÂÂThis wasnâÂÂt just an energy surge driving prices higher, as there were broad-based moves across the consumer basket.âÂÂ
The sell-off follows warnings from the International Monetary Fund, which said earlier this week that the threat of an AI share price crash rippling out across global markets is putting world financial stability at risk.
âÂÂThe consequences of an AI correction could be global,â it warned. Aside from the US, Asian markets would be most exposed, with the UK and eurozone potentially more insulated â although investors with US holdings would be hit.
The latest jitters hit China, where ShanghaiâÂÂs CSI 300 slipped as much as 2.4%, marking the lowest level since August 2025. In Taiwan, one of the worldâÂÂs leading chip makers and AsiaâÂÂs most valuable company, TSMC, fell 2% despite reporting its sixth straight quarter of profits.
European stocks were skewing lower at the start of trading, with the Europe Stoxx 600 down by 0.4%, the UKâÂÂs FTSE 100 down 0.06%, FranceâÂÂs CAC 40 down 0.19%, and SpainâÂÂs Ibex falling 0.17%. GermanyâÂÂs DAX fell by 0.53%.
In the US, stock futures pointed to losses for tech stocks, with the Nasdaq 100 futures dropping 1%.
