Tech sell-off deepens as US inflation sparks AI jitters
Asian stocks plunged Thursday as technology firms suffered another rout after forecast-topping US inflation data fueled expectations the Federal Reserve would further increase interest rates.
Technology shares continued to decline on Thursday amid rising US inflation and concerns over interest rate hikes. Tech firms suffered another drop after US inflation data indicated the Federal Reserve could raise rates further. European markets, with lower exposure to the tech sector, held up better. Seoul and Tokyo were hit hardest, with chipmakers taking the brunt of the sell-off.
The tech sell-off was fueled by higher US Treasury bond yields, suggesting investors were moving into lower-risk assets. The US consumer price index jumped more than expected, indicating persistent inflationary pressures. Tech companies are particularly vulnerable to higher rates as they heavily rely on borrowing for AI investments.
European markets saw mixed results, with London and Paris markets up, while Frankfurt was down. Seoul's tech market fell by more than 8%, with semiconductor giant SK hynix and Samsung Semiconductor falling over 9% each. Tokyo's market declined by nearly 6%, driven by losses in Advantest, Kioxia and SoftBank. Taiwan's TSMC also saw a 2% drop despite record quarterly profits, driven by demand for AI hardware.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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