A sharp sell-off of technology stocks tied to artificial intelligence intensified on Thursday, driven by fresh data showing US inflation accelerating faster than anticipated. The move sparked renewed anxiety over potential interest rate hikes and the sustainability of the AI investment boom.
South Korea’s Kospi 200 index, which tracks memory chip manufacturers, dropped more than 8% during overnight trading, closing at its lowest level in six months. Circuit breakers activated multiple times, halting trading at several points. Shares in SK Hynix and Samsung Electronics declined 11% and 9.5% respectively. Japan’s Nikkei 225 fell 4.9% on Thursday, pressured by steep declines in Kioxia, a memory chip producer, and SoftBank, a major investor in OpenAI. The drop followed a 1.9% slide in the Nasdaq Composite and a 1.1% drop in the S&P 500 on Wednesday, marking their worst performance since July.
Wall Street markets opened lower on Thursday, with the Nasdaq falling an additional 1.4% in early trading. Dell Technologies and Coherent Inc., both suppliers to AI data centers, were among the early decliners. The pressure intensified after the US Bureau of Labor Statistics reported that consumer prices rose 3.7% year-over-year in September, the fastest increase since May. Producer prices also climbed 6.3% annually, the sharpest rise since December 2022.
Analysts noted that the inflation data was broad-based, affecting multiple categories beyond energy. Jim Reid, head of global thematic research at Deutsche Bank, described the market reaction as "incredibly tumultuous" over the past 24 hours, citing concerns about the AI trade amid persistent price pressures.
The International Monetary Fund had previously warned that a sharp correction in AI-related equities could threaten global financial stability. While markets in the UK and eurozone may be less directly exposed, investors with US holdings face significant risks. In China, the CSI 300 index fell 2.4%, reaching its lowest level since August 2025. Taiwan’s TSMC, the world’s largest contract chipmaker, declined 2% despite reporting its sixth consecutive quarter of profitability.
European markets also showed weakness, with Germany’s DAX down 0.36% and Italy’s FTSE MIB slipping 1.3% in afternoon trading.
The developments underscore growing unease among investors about the intersection of artificial intelligence, monetary policy, and macroeconomic indicators.

