Global Tech Stocks Drop Again As AI Costs And Rate Fears Grow

Global technology hardware stocks fell further on Thursday as Asian chipmakers dropped behind US peers amid worries about interest rate hikes and AI funding problems. ## Market Losses Top memory makers Samsung Electronics and SK Hynix fell more than 5 percent each, pulling the South Korean Kospi down by as much as 5.7 percent. Japan's Nikkei 225 dropped over 2 percent, while chip-equipment makers Tokyo Electron and Screen Holdings fell at least 3 percent each. A major US semiconductor index has lost $1.6 trillion in market value over a six-day losing streak due to concerns over high interest rates, stretched valuations, and massive AI building costs. Strong earnings reports from Samsung and ASML Holding failed to calm investors.

Rising Concerns

Fears grew after US data on Wednesday showed consumer prices rose in September at the fastest pace in five months, leading to bets on more Federal Reserve tightening. Adding to AI trade worries, CoreWeave shares plunged and its bonds fell to distress levels, making investors question the long-term spending on AI infrastructure. The Kospi is heading for its seventh straight day of losses, marking its longest losing streak since September 2024, and trades at its lowest level since late July. Kang DaeKwun, chief executive officer at Life Asset Management, said the South Korean market valuation has dropped to an extreme level and investors must ensure tech funding issues are resolved.

Context

Global stock markets often react strongly to US economic data because the United States central bank sets monetary policies that influence global borrowing costs and investor risk appetite. High interest rates make borrowing expensive, which hits capital-heavy sectors like technology and artificial intelligence infrastructure especially hard.