Asian stock markets suffered steep losses on Thursday as investors reassessed the outlook for artificial intelligence and the cost of financing its rapid expansion. Higher-than-expected US inflation added to concerns that interest rates could rise further, putting pressure on highly valued technology stocks.
South Korea Leads the Sell-Off
South Korea's benchmark Kospi index plunged 7.6percent on October 15, 2026, closing at 5,554 points. At one stage, losses reached 9.3 percent, triggering a 20-minute trading halt.
Semiconductor giants Samsung Electronics and SK Hynix were among the hardest hit, losing 9.5 percent and 11.1 percent, respectively. Foreign investors sold approximately $2.7 billion worth of South Korean shares.
Japan's Nikkei 225 declined nearly 4.9 percent, with SoftBank, Tokyo Electron and memory-chip manufacturer Kioxia suffering substantial losses. Taiwan's Taiex fell 3.4 percent.
Inflation Raises the Stakes for AI Investors
US consumer prices rose 3.7 percent year-on-year in September, exceeding economists' forecasts. The figures increased expectations that the Federal Reserve could raise interest rates further.
Higher borrowing costs pose a particular challenge for companies investing heavily in AI infrastructure, including data centers and semiconductor manufacturing.
Investors are also questioning whether the enormous sums being committed to artificial intelligence will generate sufficient returns.
Yet the industry's underlying demand remains strong. Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, reported record quarterly net profit of approximately $23.6 billion, up 69percent from a year earlier.
The contrasting developments highlight a growing divide between corporate performance and investor expectations.
Strong earnings alone are no longer enough to support lofty technology valuations. With inflation threatening to keep borrowing costs elevated, markets are increasingly focused on when the AI investment boom will deliver sustainable profits.
Stefanie S. Klief
