The sell-off in chip stocks is deepening today, worrying investors as markets. News of a rise in US inflation to 3.7% is driving concerns about interest rate hikes, with AI-linked stocks bearing the brunt.
In South Korea, the KOSPI share index has plunged by over 8%, extending its recent losses. Chip giants Samsung Electronics (-9%) and SK Hynix (-10.5%) are leading the rout. Japan’s Nikkei 225 is sliding too – it’s down by 4.5% in late trading.
This follows a drop on Wall Street on Wednesday, where the S&P 500 index fell by 1.1% and the Nasdaq Composite lost 1.9%. That includes an 11% plunge in Dell’s shares, which CNBC blames on mounting concerns that enterprise spending on AI won’t justify the AI buildout.
The UK economy posted modest growth in August, beating expectations. The ONS says monthly GDP grew by 0.1% in August, beating expectations of a 0.1% fall. That follows unrevised growth of 0.4% in July. June’s growth rate has been revised up too – to +0.4%, up from +0.3% previously.
However, emeritus professor Joe Nellis, head of economic research at accountancy and advisory firm MHA, points out that the underlying pace of growth in the UK economy remains weak.
August’s growth means the UK economy continues to perform well against international rivals. Britain had already grown faster than fellow-G7 members France, Germany, Italy, Japan and Canada in the first half of 2026, and roughly as fast as the US.
Jake Finney, senior economist at PwC, says: ‘The latest GDP figures are encouraging, with the economy growing by 0.7% in the three months to August, its strongest growth rate since May. On its current trajectory, the UK is likely to record growth comfortably above 1% this year, which would probably be enough to make it the second-fastest-growing economy in the G7.’
Today’s better-than-forecast UK growth report is good news for chancellor John Healey as he hobnobs with other finance ministers at the IMF meeting in Bangkok. But it may encourage the Bank of England to raise interest rates as soon as its next meeting in November.
Today’s key events
• 10am BST: Eurozone industrial production report for August
• 1.30pm BST: US initial jobless claims data
• 1.30pm BST: US PPI index of producer price inflation in September
We’ll be tracking all the main events throughout the day on our business live blog …
