European Chipmakers Tumble as Inflation Data Fuels Rate-Hike Fears, AI Rout

3-line summary

• European chip and chip-equipment stocks fell sharply Thursday as the US/Asia tech selloff spread, per Investing.com: Germany's Infineon and Aixtron each fell about 8%, the Netherlands' ASM International fell about 8% and ASML fell about 5.5%, BE Semiconductor fell 5.7%, France's STMicroelectronics fell 6.5%, and smaller names Suss MicroTec, Elmos Semiconductor and Switzerland's ams OSRAM fell 5.2-7.2%; Siltronic, Soitec and Technoprobe fell 6.5-10%. AI-exposed industrials Nokia, Legrand, Schneider Electric and ABB fell 4-5%.
• The selloff followed Wednesday's Asian tech rout (Samsung -9.4%, SK Hynix -11%, Kioxia -12.3%, SoftBank over -9%, TSMC -2%, per the report), with SK Hynix down a further 6.7% in US pre-market trading. September US CPI came in at 3.7% annually (vs. 3.6% forecast) and core CPI at 2.6% (vs. 2.5% forecast), driven largely by energy costs; rate futures still price about a 71% chance the Fed holds at its October 28 FOMC meeting, after briefly pricing closer to even odds on a hike. Credit markets wobbled and bonds rallied, with the report describing heavy AI-infrastructure and data-center investment coming under pressure from higher rates; Wednesday marked a third straight down day for US stocks.

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