A deepening technology-share sell-off, fueled by hotter-than-expected U.S. inflation data, sent South Korean and Japanese stocks sharply lower on Thursday as investors weighed the risk of higher interest rates.
In early trading, South Korea’s Kospi fell 7.1% and Japan’s Nikkei 225 dropped 3.9%; later reports showed losses deepening to about 8% and 5%, respectively. Chipmakers led the retreat: Samsung Electronics and SK Hynix fell heavily in Seoul, while SoftBank Group, Tokyo Electron and memory-chip maker Kioxia slid in Tokyo. The declines followed a weak session on Wall Street, where the S&P 500 fell 1.1% and the technology-heavy Nasdaq lost 1.9%.
U.S. consumer prices rose 3.7% year over year in September, up from 3.4% in August and more than economists had forecast. The inflation reading revived concern that the Federal Reserve may keep interest rates higher, or raise them further, making borrowing more expensive and potentially weighing on growth-focused technology shares. The sell-off also came amid questions about whether the strong rally in artificial-intelligence-related stocks had pushed valuations too high.
Losses spread beyond the two main markets, with Taiwan’s Taiex and Hong Kong’s Hang Seng also declining.