Global sell-off hits Asia as chip stocks plunge

A sell-off in global equities spread to Asia on Thursday as deepening losses in chip stocks followed faster-than-expected US inflation, fueling bets the Federal Reserve will need to raise interest rates further. MSCI’s Asia-Pacific equities gauge slid 2.2%, with South Korea’s Kospi leading regional losses with a 7% drop as chipmakers Samsung Electronics and SK Hynix sank over 8%. The rout followed a Wall Street slide that pushed the Russell 2000 into correction, while US semiconductor stocks had their longest losing streak since May 2025. Stubborn inflation, driven by elevated oil prices since the Middle East war, is raising prospects of more aggressive Fed tightening. Treasuries rallied on haven demand, with 10-year yields falling to 5.12%, while markets now price about 40 basis points of Fed hikes by January.