Semiconductor stocks fall 11% on inflation and AI capex warnings

The US semiconductor index lost approximately 11% over the last six trading days, driven by a combination of factors. Chinese memory chip maker CXMT reported significant technological progress, pressuring established providers like Samsung, SK Hynix, and Micron. Although Samsung reported an operating quarterly profit of 80 billion US dollars, its stock fell. Rising inflation, which exceeded expectations, increased the probability of a US interest rate hike at the end of October. Broadcom CEO Hock Tan warned that capital could become the biggest bottleneck for AI, comparing current investors to casino gamblers. US bank earnings were mixed; most saw strong growth in trading and investment banking revenues, benefiting from high stock market activity. Bank of America was an outlier with revenue down 3% and net profit down 17%, impacted by a 1.2 billion dollar regulatory fine and a 17% drop in bond trading. BlackRock reported record assets under management of 15.5 trillion US dollars, though analysts suggest higher interest rates might pressure asset managers as investors shift from equities to 4% yields.