A broad equity selloff extended to Asia on Wednesday, driven by a deepening chip rout on Wall Street and hotter-than-expected US inflation data. Markets braced for potentially more aggressive Federal Reserve rate hikes following September CPI showing underlying price pressures rising 3.7% annually. MSCI's Asia Pacific equities index dropped 1.5%, heading for a fourth straight decline, with South Korea's Kospi index tumbling up to 6.5% as Samsung Electronics and SK Hynix led chip losses.
Tech sentiment remained weak, with Nasdaq 100 futures falling 1% amid concerns the AI-driven rally was losing steam. Core Weave shares plunged as much as 17% amid debt market pressure, while Treasuries rallied after initially sinking, with two-year yields ending higher but five-year yields topping 5.15% for the first time since 2007. Gold recovered to about $4,140 an ounce, and Brent crude fell 0.5% to $105.50 a barrel.
The inflation surprise fuels bets of further Fed tightening, with markets pricing in nearly 40 basis points of hikes by January. Analysts warn stubborn inflation, exacerbated by elevated oil prices, keeps the Fed at risk of falling behind the curve.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing