Asia Stocks Tumble, South Korea's Kospi Slumps 7% on Chip Rout, Fed Rate Fears

3-line summary

• Asian markets fell sharply, per Investing.com: Kospi -7.2%, Nikkei 225 -4.7%, MSCI Asia Pacific index down about 3% (near its lowest since July), Hang Seng -1.1%, CSI 300 -1.4%, Shanghai Composite -1.5%, Singapore's STI -0.9%, Australia's ASX 200 and New Zealand's NZX 50 each -0.1% (India's Nifty 50 futures rose 0.4%). Taiwan's Largan, Foxconn and TSMC each fell more than 2%. Chip and tech stocks were hit hardest: SK Hynix -11.2%, Samsung Electronics -9.4%, Japan's Kioxia and LG Innotek both down more than 10%, and in Hong Kong/China, MiniMax -8.7%, Z.AI -9.1%, SMIC -4.5%, Baidu -4.4%, Alibaba -3.1%. The US Philadelphia Semiconductor Index fell for a sixth straight session, its longest losing streak since May 2025.
• Cited drivers: growing wariness toward memory-chip makers after China's CXMT reported progress on higher-density DRAM designs; AI-investment skepticism after Broadcom CEO Hock Tan compared some AI investor behavior to gambling, stoking valuation and infrastructure-payoff concerns; AI-financing stress, with CoreWeave shares down as much as 17% intraday and its 2032 bonds trading below 78 cents on the dollar; and hotter-than-expected US inflation (partly gasoline-driven) raising Fed tightening odds — the October 27-28 FOMC 25bp-hike probability rose to 31.6% from 22.1% the prior day, with the fed funds range at 3.75-4.00% after September's hike. The Nasdaq Composite fell 1.9% and the equal-weight Russell 2000 entered correction territory; Brent crude fell $1.39 to $104.67 and WTI fell $1.02 to $94.07.

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