Thursday’s session is bringing a sharp sell-off in shares of semiconductor manufacturers and companies linked to the development of AI infrastructure.
Today’s sell-off is also a continuation of declines that began in the US and Asian markets. The sudden deterioration in sentiment is driven mainly by two factors:
- US inflation: Yesterday’s CPI reading showed inflation accelerating to 3.7% year on year versus the expected 3.6%. Core inflation rose to 2.6%, increasing concerns about the need for further monetary tightening by the Fed. The futures market is currently pricing in about a 70% probability that rates will be kept unchanged at the October meeting.
- TSMC results: The results published today by the Taiwanese giant indicate that the sector’s fundamental strength remains intact, but investors are clearly focusing on weaknesses rather than strengths in the earnings release. Despite record results, management signals caution regarding the outlook for 2027, pointing to uncertainty, rising component prices, and capital-intensive investments associated with 2-nanometer production.
The scale and breadth of the sell-off may indicate a continued reduction in investor exposure across the entire AI supply chain, rather than only a deterioration in the prospects of individual semiconductor manufacturers.
JP255 chart (D1)
Particularly sharp declines can be seen in the Nikkei. The semiconductor sell-off, problems among neo-cloud sector companies, and the inflation reading are amplifying negative developments in Japan’s concentrated index. Source: xStation5.
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