Global Markets: Asian markets sell off as AI trades crumble after hot US CPI data

Taiwan Semiconductor Manufacturing

15/10/2026 01:46

CME FedWatch shows implied October 28 hike odds at 31.6%, up from 22.1% a day earlier
MSCI Asia-Pacific shares outside Japan fall 1.2%, led by KOSPI's 5.6% plunge
Australian dollar slips 0.2% after September employment falls by 39,300 jobs
By Gregor Stuart Hunter
SINGAPORE, Oct 15 (Reuters) - Markets started the day on the back foot as trading kicked off in Asia on Thursday, as a quicker-than-expected increase in US consumer price inflation upped expectations for the Federal Reserve to act later this year and pushed stocks lower.
MSCI's broadest index of Asia-Pacific shares outside Japan .MISX00000PUS was down 1.2%, led by a 5.6% plunge in South Korea's KOSPI .KS11, while the Nikkei 225 .N225 fell 1.3%. S&P 500 e-mini futures EScv1 were down 0.3%. 
"Asia faces another difficult session," said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne. "KOSPI and Nikkei futures point to renewed technology weakness, with leveraged ETF flows and AI infrastructure credit risk firmly in focus." 
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."
The CPI data lifted expectations of interest rate hikes from the Federal Reserve over the course of the year ahead, possibly as soon as later this month. Fed funds futures are now pricing an implied 31.6% probability of a 25-basis-point hike at the US central bank's next two-day meeting on October 28, compared to a 22.1% chance a day earlier, according to the CME Group's FedWatch tool.
The yield on the US 10-year Treasury bond US10YT=TWEB fell 4.4 basis points to 5.144%. Against the yen JPY=, the US dollar slid 0.2% to 157.925 yen, while the euro EUR= was up 0.3% at $1.1194.
The Australian dollar AUD= declined 0.2% to $0.6956 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. AI chip giant TSMC 2330.TW will also release earnings for the third quarter later in the Asian trading session.

 (Reporting by Gregor Stuart Hunter; Editing by Christian Schmollinger)
 ((gregor.hunter@thomsonreuters.com))