AI Share Sell-Off Deepens on Global Markets Amid US Inflation Fears

A sell-off of shares linked to artificial intelligence (AI) deepened on global markets on Thursday, 15 October. Traders already wary of the heavily indebted sector were spooked by fears of rising inflation and possible interest rate increases in the United States.

Asian markets take the heaviest losses

South Korea's benchmark Kospi 200 index, which is heavily weighted towards memory chip makers, fell 8.1% overnight and closed at its lowest level in six months. The drop was steep enough to trigger circuit breakers, which halted trading at several points. Shares in SK Hynix lost nearly 11% and Samsung Electronics fell 9.5%.

Japan's Nikkei 225 dropped 4.9% on Thursday. Memory chip maker Kioxia slid 11%, while SoftBank, a major investor in OpenAI, the company behind ChatGPT, fell 10%. In China, Shanghai's CSI 300 slipped by as much as 2.4%, its lowest level since August 2025. Taiwan's TSMC, one of the world's leading chip makers, lost 2% even though it reported profits for a sixth consecutive quarter.

Why markets are rattled

On the previous day on Wall Street, the Nasdaq Composite fell 1.9% and the S&P 500 dropped 1.1%, its worst performance since July. The trigger was US data showing the consumer price index rising to 3.7% in September, higher than expected and the fastest increase since May, when inflation reached a three-year peak of 4.2%. Some market participants are now pricing in another US Federal Reserve rate rise as early as the end of the month.

Deutsche Bank analysts led by Jim Reid said the price rise was not driven by energy alone, as increases were broad-based across the consumer basket. Fuel costs have been pushed up by geopolitical tensions, including the ripple effects of the US war on Iran.

The International Monetary Fund warned earlier this week that an AI share price crash could spread across global markets and threaten financial stability. It said Asian markets would be most exposed after the US, while the UK and eurozone could be more insulated, although investors holding US assets would still be hit.

Europe and US futures

European markets opened lower: the Stoxx 600 was down 0.4%, Germany's DAX 0.53%, France's CAC 40 0.19%, Spain's Ibex 0.17% and the UK's FTSE 100 0.06%. Nasdaq 100 futures in the US pointed to a 1% fall.