Stock selloff extends to Asia as chip rout deepens

Asian shares — Tech sentiment remained weak, with Nasdaq 100 Index futures falling as much as 1%.

A selloff in equities spread to Asia after chip stocks tumbled on Wall Street, as hotter-than-expected US inflation fueled bets on more aggressive Federal Reserve rate hikes. Treasuries rallied.

MSCI Inc.’s Asia Pacific equities gauge dropped 1.5%, heading for a fourth straight decline, led by losses in South Korea, a bellwether for artificial intelligence investment. The Kospi Index slumped as much as 6.5% to its lowest since late July, with chip heavyweights Samsung Electronics Co. and SK Hynix Inc. tumbling at least 7%.

Tech sentiment remained weak, with Nasdaq 100 Index futures falling as much as 1%. Earlier, the Russell 2000 entered a correction and a closely watched gauge of US semiconductor stocks had its longest losing streak since May 2025. CoreWeave Inc. shares plunged as much as 17%. Its debt due in 2032, which investors bought at par four months ago, traded at less than 78 cents on the dollar.

The fastest US inflation in five months prompted traders to ramp up bets on further Fed tightening, raising the prospect of additional rate hikes, even if policymakers pause in October. While Treasuries initially sank after the data was announced, they recovered most of the losses on appetite for bond yields near multiyear highs.

Stubborn US inflation, fueled by elevated oil prices since the Middle East war broke out, is raising the prospect of more aggressive Fed rate hikes. At the same time, equity markets are coming under pressure after a blistering rally in AI-related stocks, bringing the US market’s longest stretch of tranquility since before the Covid-19 pandemic to an end.

“With broadening inflation pressures becoming more evident in today’s CPI report, the Fed is increasingly at risk of falling behind the curve in containing inflation,” wrote Ronald Temple, chief market strategist for Lazard’s Financial Advisory and Asset Management businesses.

In other corners of the market, Treasuries advanced at the start of trading in the Asian session, with yields falling at least three basis points across the curve. Gold recovered after three days of declines to about $4,140 an ounce.

Providing some relief, global crude oil benchmark Brent fell 0.5% to $105.50 a barrel.

Earlier, the US consumer price index rose 0.6% in September from a month earlier, according to Bureau of Labor Statistics data out Wednesday, and climbed 3.7% from a year earlier. The move was driven by rising fuel costs, while a gauge of underlying price pressures also rose more than expected.

Fed Chairman Kevin Warsh has vowed not to steer markets with his own near-term outlook for monetary policy. But the inflation surprise will heighten scrutiny of his remarks late Thursday New York time in Bangkok, where he is scheduled to appear in a fireside chat with International Monetary Fund Managing Director Kristalina Georgieva.

Two-year Treasury yields had jumped as much as 16 basis points on Wednesday following the inflation reading before ending the session two basis points higher, while the five-year topped 5.15% for the first time since 2007.

Markets now price about 40 basis points of hikes by the end of January, with the odds of an October move also rising.

“It’s clear as ever that inflation is stubborn and moving in the wrong direction,” said Skyler Weinand at Regan Capital. “While we expect the Fed to pause on any rate changes in October, we expect rate hikes to resume in December.”