Global Tech Sell-Off Intensifies Following Hotter-Than-Expected US Inflation Data

Global equity markets faced a sharp downturn on Thursday as a deepening sell-off in the technology sector rippled across Asian exchanges. The decline was triggered by disappointing US inflation data, which reignited concerns over interest rate trajectories and cooled the investor enthusiasm that had previously fueled a historic rally in artificial intelligence-related stocks. Major indices across the Asia-Pacific region saw significant losses, signaling a broader retreat from high-growth assets.

South Korea’s Kospi index led the decline, plummeting 7.7% to 5,548.78, a stark drop from its June peak of 9,000. Heavyweight tech firms bore the brunt of the volatility, with Samsung Electronics falling 9.5% and SK Hynix plunging 11.4%. Similarly, Japan’s Nikkei 225 tumbled 4.8%, with SoftBank Group shedding 9.4% and Tokyo Electron dropping 7.3%. In Taiwan, the Taiex fell 3%, while Hong Kong’s Hang Seng and the Shanghai Composite also recorded losses of 1% and 1.4%, respectively.

The market turbulence follows a negative session on Wall Street, where the Nasdaq Composite slipped 1.9% and the S&P 500 fell 1.1%. The catalyst for the sell-off was the US consumer price index report, which revealed a 3.7% year-on-year increase for September, exceeding the 3.4% recorded in August and surpassing economist expectations. Key AI-linked stocks, including Nvidia, Broadcom, and AMD, saw their valuations contract as investors reassessed the sustainability of the sector's rapid growth amid persistent inflationary pressures.

Looking ahead, market sentiment remains fragile as investors await further corporate earnings reports, including the highly anticipated results from Taiwan Semiconductor Manufacturing Co. (TSMC). The shift in momentum suggests a period of heightened volatility as global markets grapple with the dual pressures of stubborn inflation and the potential for a cooling AI boom. Analysts are closely monitoring whether this correction represents a temporary adjustment or the beginning of a more sustained period of risk aversion across international financial markets.