Tech sell-off gathers pace as chipmakers are hammered
SPY•Asian tech stocks plunged on Thursday, with South Korea’s KOSPI falling almost 8% and the Nikkei 225 down 5%, as investors reassessed AI-related stocks amid high and rising interest rates. US stock futures pointed to further declines after the S&P 500 fell 1.1% and the Nasdaq Composite dropped 1.9% on Wednesday.
1. Asian shares slide
A sharp selloff in Asian technology stocks weighed on global equity markets on Thursday. The MSCI Asia-Pacific index excluding Japan fell 3.4%, while South Korea’s KOSPI plunged almost 8% in its seventh consecutive decline and Japan’s Nikkei 225 fell 5% in its sixth straight drop.
2. AI stocks under pressure
Chipmakers and AI-linked companies were among the hardest hit. Samsung Electronics fell 9.9%, while SK Hynix and Kioxia each dropped more than 11%; SoftBank Group fell more than 9%. Oracle, SoftBank and CoreWeave also saw credit-default swaps widen, in some cases to records. TSMC bucked the trend, reporting a 69% increase in third-quarter net profit to a record T$763.1 billion ($23.59 billion), above market forecasts.
3. Rates shape outlook
The S&P 500 fell 1.1% on Wednesday, the Nasdaq Composite lost 1.9%, and semiconductor stocks extended losses to a sixth day after US inflation accelerated more than expected in September. Traders priced a 75% probability that the Federal Reserve will hold rates at its October 28 meeting. Early European shares were down less than 0.3%, while the US 10-year Treasury yield dropped 10 basis points during Asian and European trading.
