Global Tech Rout Deepens as Inflation and AI Debt Fears Hit Markets
Overnight trading saw a sharp decline in technology and AI-related shares after U.S. inflation came in above expectations and concerns grew over CoreWeave's debt load. South Korea's KOSPI fell 8%, triggering a circuit breaker, while U.S. semiconductor stocks faced losses of about $2 trillion in market value. The selloff spread across Asia and the U.S., with credit default swap spreads for tech companies reaching record levels.
U.S. inflation exceeded forecasts, intensifying rate concerns while CoreWeave’s debt troubles deepened. South Korea’s KOSPI fell 8%, halting trading; the Nikkei 225 lost nearly 5%. Global chip shares were on course to lose roughly $2 trillion, with SK Hynix down over 22%.
Credit-default insurance costs for technology firms reached records. TSMC’s quarterly profit rose 69% to a record yet its shares declined. Nasdaq reported a network outage affecting U.S. equity data. FMC dropped 35%, ManpowerGroup fell 15–18%, and Charles Schwab slipped about 4.8% despite record adjusted EPS.
The selloff could pressure retirement and investment accounts, especially for people with tech-heavy portfolios. Tech firms and AI infrastructure borrowers may face higher financing costs, potentially slowing hiring or projects. Workers in semiconductors, staffing, and related sectors might see greater uncertainty. Consumers could eventually feel effects if tighter credit and weaker markets reduce spending or business investment. The episode may also sharpen public debate over how the AI boom is financed.