South Korea’s Kospi Drops More Than 7% as U.S. Inflation Revives Rate Fears

South Korea’s Kospi plunged more than 7% in Thursday trading as hotter U.S. inflation revived bets on further Federal Reserve rate increases, adding pressure to Asian risk assets.

The September U.S. consumer price index (CPI) rose 3.7% from a year earlier, up from 3.4% in August and above economists’ expectations.

Chipmakers led local losses: Samsung Electronics and SK Hynix each dropped more than 8%. The Korea Exchange paused program trading for five minutes after the plunge. The MSCI Asia Pacific index fell 2.2%, reaching its lowest level since July.

The pressure followed losses on Wall Street Wednesday. The Nasdaq Composite slid 1.88%, while the S&P 500 lost 1.1%. Market pricing shifted toward roughly 50 basis points of cumulative Fed rate increases by the end of next January, although traders still broadly expected rates to hold this month.

The cross-market retreat puts risk appetite back in focus for crypto investors as markets reassess the path of U.S. interest rates.