Global Markets: Tech stocks tumble as data centre debt worries hit AI trades

Softbank

15/10/2026 07:28

Recasts intro, updates markets through Asia afternoon, adds TSMC results and CDS prices
CME FedWatch shows implied October 28 hike odds at 25%, hold at 75%
MSCI Asia-Pacific shares outside Japan fall 3.4%, led by KOSPI's more than 8% plunge
Australian dollar slips 0.3% after September employment falls by 39,300 jobs
By Gregor Stuart Hunter
SINGAPORE, Oct 15 (Reuters) - Tech stocks took a beating, credit markets wobbled and bonds rallied on Thursday as crowded bets on data centres and other AI infrastructure faced a reckoning from high and rising interest rates.
MSCI's broadest index of Asia-Pacific shares outside Japan .MISX00000PUS tumbled 3.4% to tally a fourth straight day of losses, led by a plunge of more than 8% in South Korea's KOSPI .KS11, while the Nikkei 225 .N225 fell 5.4%. S&P 500 e-mini futures EScv1 were down 0.4%. 
"The selloff in Asia looks less like a sudden deterioration in technology fundamentals and more like a repricing of the cost of capital," said Charu Chanana, chief investment strategist at Saxo Bank in Singapore.
"Investors are not questioning whether AI demand exists," she said. "They are increasingly questioning what price they should pay for that growth when interest rates are high, volatile and potentially moving higher again."
Overnight, stocks on Wall Street logged their third day of declines after US consumer price inflation accelerated by more than expected in September.
The S&P 500 .SPX fell 1.1%, the Nasdaq Composite .IXIC tumbled 1.9% and a gauge of semiconductor stocks .SOX extended losses into a sixth day, as the prospect of higher interest rates pummelled shares of Oracle, CoreWeave and other AI stocks sensitive to higher borrowing costs.
"While the initial selloff was triggered by the hotter-than-expected CPI, tech was the main driver of today’s selloff," JPMorgan analysts wrote in a note. "AI was again the main challenge ... with financing risks and IPO timelines still at the centre of the story."
Asian stocks in the tech hardware supply chain were hard hit on Thursday. Taiwan Semiconductor Manufacturing Company 2330.TWTSM fell 2%, Samsung Electronics 005930.KS plunged 9.9%, memory chipmakers SK Hynix 000660.KS and Kioxia Holdings 285A.T plummeted more than 11% each, and AI investor SoftBank Group 9984.T lost more than 9%.
The cost of insuring AI-linked tech giants against default has also increased, in some cases to record levels, with credit default swaps widening for cloud computing giant Oracle ORCL.N, AI investor SoftBank 9984.T and data-centre operator CoreWeave CRWV.O.
Some strategists found reasons for optimism, noting that volumes were relatively light and October is typically a volatile time of year for markets.
"I’m not worried, because stocks are not expensive, there is no sign of a recession, and demand still massively exceeds supply in most parts of the AI story," said Mark Matthews, head of research for Asia at Bank Julius Baer in Singapore.
Defying the gloom, AI chip giant TSMC 2330.TW posted a 69% jump in third-quarter net profit to a record T$763.1 billion ($23.59 billion) on Thursday, beating market forecasts. 
In early European trades, pan-region futures STXEc1 were down 0.9%, German DAX futures FDXc1 slipped 0.6% and FTSE futures FFIc1 were 0.2% lower.
The backdrop of investor anxiety drove safe-haven buying of government bonds, with the yield on the US 10-year Treasury bond US10YT=TWEB down 8.2 basis points at 5.106%.
"We continue to think that yields at current levels offer decent value," DBS analysts wrote in a note. "We are not convinced that the Fed will have to deliver back-to-back hikes on the back of one set of CPI numbers." 
The inflation data reshaped expectations for the Fed's rate path, with traders briefly pricing in roughly even odds of a hike later this month before scaling back those bets.
Fed funds futures are now pricing an implied 75% probability the US central bank will remain on hold at the end of its next two-day meeting on October 28, little changed from a day earlier, according to the CME Group's FedWatch tool.
"The upside surprise in US CPI and the subsequent rally in bonds is highly counterintuitive," said Prashant Newnaha, senior rates strategist at TD Securities. "The cleanest read through is that the slump in AI is repricing growth expectations down, leading to bonds serving as a hedge for stocks."
Against the yen JPY=, the US dollar was down 0.2% at 157.975 yen, while the euro EUR= was up 0.5% at $1.1211.
The Australian dollar AUD= declined 0.3% to $0.6954 after employment unexpectedly decreased by 39,300 jobs in September, against expectations of an increase of 20,000.
Investor attention turns to speeches from Fed officials speaking in Bangkok, including Chair Kevin Warsh, for clues on the US central bank's next move, as well as US producer prices and retail sales data due for release later on Thursday. 
In oil markets, Brent crude LCOc1 was down 1.3% at $104.71 a barrel as traders weighed up the effects of US sanctions relief on supply against attacks on shipping through the Strait of Hormuz.
     
     

(Reporting by Gregor Stuart Hunter; Editing by Christian Schmollinger and Shri Navaratnam and Saad Sayeed)
((gregor.hunter@thomsonreuters.com))