Asian shares fell after US inflation rose faster than expected in September, raising rate-hike expectations. MSCI Asia-Pacific shares outside Japan dropped 1.2%, South Korea’s KOSPI fell 5.6%, and markets priced a 31.6% chance of a 25-basis-point Fed hike at its October 28 meeting, up from 22.1%.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2% on Thursday, led by a 5.6% plunge in South Korea’s KOSPI; Japan’s Nikkei 225 dropped 1.3%. S&P 500 e-mini futures were down 0.3%. A quicker-than-expected rise in US consumer prices in September lifted expectations that the Federal Reserve could raise rates later this year.
Wall Street stocks fell for a third day overnight. The S&P 500 declined 1.1%, the Nasdaq Composite dropped 1.9%, and a semiconductor-stock gauge extended its losing streak to six days. Oracle, CoreWeave and other AI stocks sensitive to borrowing costs were among those under pressure, with financing risks and IPO timelines in focus.
Fed funds futures showed a 31.6% implied probability of a 25-basis-point hike at the Fed’s October 28 meeting, up from 22.1% a day earlier. The Australian dollar fell 0.2% after Australian employment unexpectedly declined by 39,300 jobs in September, against expectations for a 20,000 increase. Investors were also watching speeches by Fed officials in Bangkok and US producer prices and retail sales data due later Thursday.
