Selling dominated trading in the Tokyo stock market on the 15th, following a sharp decline in AI and semiconductor-related stocks in the previous day's New York session. The Nikkei 225 fell to levels below ¥64,500 in morning trading. The decline appears to have been driven by concerns over a renewed acceleration in US inflation and the financing of AI investment.
In the US market, the year-on-year increase in the Consumer Price Index (CPI) accelerated to 3.7%, from 3.4% in August, while core CPI rose to 2.6%. Market expectations were for 3.6%, rekindling expectations of a Federal Reserve rate hike. Following the rate hike at the September FOMC meeting, expectations of a December hike are predominant, but concerns about inflation remain.
High interest rates and concerns over financing AI investment weighed on semiconductor-related stocks, sending the Philadelphia Semiconductor Index, or SOX, down 4.3%. Despite ASML reporting higher revenue and profit, sales were only in line with market expectations, prompting post-event selling, reports said. WTI crude oil futures rose to the $95 range.
In the Tokyo market, the Nikkei 225 initially rose by more than ¥600 before semiconductor-related stocks fell after ASML's earnings announcement, and it closed ¥33.23 lower, its first decline in 5 trading days. The focus today is TSMC's July–September earnings, with attention on whether the company will raise its full-year revenue outlook. If the outlook is left unchanged, selling on the exhaustion of catalysts could intensify.
Trading is expected to remain sensitive to the FOMC's interest-rate outlook and movements in AI and semiconductor-related stocks. Current news reflects the impact of falling AI stocks and concerns over US inflation.