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Global semiconductor and technology stocks sold off sharply on Thursday, with South Korea’s SK Hynix plunging over 10% and Samsung Electronics falling more than 8%. The sell-off followed losses on Wall Street after hotter than expected US inflation data increased concerns that the Federal Reserve could raise interest rates further, raising borrowing costs for companies investing heavily in AI infrastructure.
Additionally, China’s CXMT recently announced a breakthrough in memory-chip technology, raising concerns about future competition for established manufacturers. Meanwhile, Broadcom and Intel executives warned that access to financing could become a major bottleneck for AI expansion. Although demand for AI chips remains strong, investors are increasingly questioning whether spending levels, valuations, and future supply growth can justify current market expectations.
On another note, TSMC reported record third quarter results, beating analyst expectations as strong global demand for AI chips continued to drive growth.
Oil prices fell slightly in the past few hours, with Brent crude dropping 1.6% to $104.38 per barrel and WTI declining 1% to $94.15, as investors weighed potential supply disruptions against efforts to stabilize the market.
Despite these risks, prices were pressured by reports that the US administration is considering easing sanctions on vessels transporting Russian oil.
In the UK, the economy grew by 0.1% month on month in August, beating expectations of a 0.1% contraction but slowing from 0.4% growth in June and July.
Gold recovered modestly today, ending a three-day losing streak as a weaker US dollar and falling Treasury yields provided support. However, US inflation remains a concern, with headline CPI accelerating to 3.7% year-on-year in September from 3.4%, while core inflation increased to 2.6% from 2.4%.
Despite the rebound, gold’s upside remains constrained by expectations of further Fed tightening amid escalating Middle East tensions and risks to oil supplies. Investors are now watching US PPI data and Fed Chair Kevin Warsh’s upcoming remarks for further clues on monetary policy.
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