Tech sell-off deepens as US inflation and AI debt unsettle markets

A sell-off in artificial-intelligence-linked shares intensified across global markets as concerns over US inflation and the sector’s heavy debt unsettled investors.

South Korea’s Kospi 200, heavily weighted towards memory-chip makers, fell 8.1% to a six-month closing low. Circuit breakers halted trading at several points. SK Hynix shares dropped nearly 11%, while Samsung Electronics fell 9.5%.

The Asian declines extended a Wall Street sell-off from the previous session, when the Nasdaq Composite fell 1.9% and the S&P 500 lost 1.1%—their weakest performance since July.

Inflation raises rate-rise bets

US inflation reached 3.7% in September, exceeding expectations and recording the fastest price growth since the consumer price index reached a three-year high of 4.2% in May. Investors increased their expectations of further Federal Reserve rate rises, with some pricing in another move by the end of the month.

Deutsche Bank analysts led by Jim Reid said markets had endured an exceptionally turbulent 24 hours after the strong CPI data and growing concerns about the AI trade. Reid said the increase was broad-based rather than driven only by fuel prices.

Asian markets extend losses

Japan’s Nikkei 225 fell 4.9%. Shares in memory-chip maker Kioxia dropped 11%, while SoftBank declined 10%; the company is a major investor in OpenAI, the owner of ChatGPT. In China, the CSI 300 fell as much as 2.4%, reaching its lowest level since August 2025.

Taiwan Semiconductor Manufacturing Company fell 2% despite reporting its sixth consecutive quarter of profit. Europe’s Stoxx 600 was down 0.4% in early trading, while the FTSE 100 fell 0.06%, France’s CAC 40 0.19%, Spain’s Ibex 0.17% and Germany’s DAX 0.53%.

IMF flags global financial risk

The sell-off followed a warning from the International Monetary Fund that a collapse in AI share prices could spread through global markets and threaten financial stability. The IMF said Asian markets could be the most exposed after the US, while the UK and eurozone might be more insulated, although investors holding US assets could still be affected.

Nasdaq 100 futures pointed to further losses for US technology shares, falling 1%.