Rising AI financing risks and interest rate concerns drive consecutive sharp declines in chip stocks.

The global tech hardware stock sell-off extended into Thursday. Driven by expectations of Federal Reserve interest rate hikes and financing headwinds in the AI sector, shares of Asian chip manufacturers followed U.S. equities lower. South Korea’s Samsung Electronics fell more than 7% and SK Hynix dropped over 8%, dragging the KOSPI index down by over 6% at one point. The Nikkei 225 index fell more than 3% intraday, with Tokyo Electron and Screen Holdings declining by 3% each. As market concerns intensify over rising interest rates, overvaluation, and the massive capital needed to build AI infrastructure, investor confidence remains under pressure. Despite strong earnings reports from Samsung and ASML, they failed to reassure investors. Meanwhile, shares of AI cloud infrastructure firm CoreWeave plummeted, while its bond prices fell to levels typically signaling corporate financial distress, prompting investors to once again question the sustainability of large-scale AI infrastructure spending. Data released Wednesday showed that U.S. September CPI rose at a 5-month high, boosting market expectations of Federal Reserve interest rate hikes.