Asian stocks plunge as hot US inflation spurs rate hike bets

Asian stocks plunged Thursday as tech firms led a rout after US inflation data exceeded forecasts, fueling expectations the Federal Reserve will raise interest rates higher. Seoul and Tokyo suffered the heaviest losses, with chipmakers hit particularly hard. The US consumer price index rose to 3.7 percent in September, driven largely by a 9.1 percent surge in gasoline costs amid the Iran war and Strait of Hormuz disruptions. Traders now see a 37.1 percent chance of a Fed rate hike this month, up from 22 percent before the data. Tech firms reliant on borrowing for AI investments led declines, with Seoul's Kospi diving eight percent and Tokyo's Nikkei shedding over five percent. A December hike is now effectively fully priced, while US 10-year Treasury yields hit 24-year highs before retreating.