Asian markets slide as hot US CPI data drags AI stocks lower

Asian markets moved lower after a hotter-than-expected US inflation report pushed up expectations for Federal Reserve rate hikes. The selloff landed hardest on the AI trade, which had already been carrying a lot of optimism on its back. The trigger was the September 2026 consumer price index. Headline inflation hit 3.7% year-over-year, and investors spent the following session repricing just about everything with “AI” in the pitch deck. The inflation number that spooked everyone Economists had expected the headline CPI figure to land at 3.6%. Instead it came in at 3.7%, up from the previous reading of 3.4%. Core CPI, which strips out volatile food and energy costs, rose 2.6% from a year earlier. The monthly core reading also beat the 0.2% forecast, adding to the impression that price pressures are not cooling on their own. Markets reacted quickly. Rate-hike odds for the October FOMC meeting rose to about 37-49% after the report was released. Wall Street took the first hit The damage started in New York on October 14. The Nasdaq composite fell approximately 1.9%, its worst session since late July. The S&P 500 dropped around 1.1% in the same session. The broader selloff also refl...