Emerging-Market Stocks Gain About 1%; Warsh Discusses AI Demand

The MSCI Emerging Markets Index gained about 1% on Oct. 16, while Federal Reserve Chair Kevin Warsh separately said artificial intelligence (AI) investment is lifting demand ahead of longer-term productivity gains.

Warsh spoke with International Monetary Fund (IMF) Managing Director Kristalina Georgieva at a fireside chat during the annual meetings in Bangkok. The session ran from 11:30 p.m. ET Oct. 15 to midnight ET Oct. 16 (3:30–4 a.m. UTC Oct. 16). He described AI as a “most consequential change” to the economy and said investment is boosting demand before the technology’s effects reach the supply side.

The remarks paired a current demand effect with AI’s longer-term productivity potential. Warsh’s earlier comments on AI’s productivity potential addressed that longer-term outlook. He gave no signal about the Fed’s next rate decision, saying, “I don’t prejudge meetings.”

The index has significant exposure to Asian chipmakers. As of Sept. 30, Taiwan Semiconductor Manufacturing Co. represented 15.63% of the benchmark, Samsung Electronics 7.55% and SK Hynix 5.90%. Those three companies were among the index’s largest holdings.

Nonresident investors withdrew $26.3 billion from emerging-market portfolios in September, the first monthly outflow since June, following $11.4 billion in August inflows. The September total covered equities and debt: equity outflows were $19.2 billion and debt outflows were $7.0 billion. Those component figures are rounded and total $26.2 billion, slightly below the $26.3 billion overall figure.

In the United States, consumer prices rose 0.6% in September from August on a seasonally adjusted basis and increased 3.7% over 12 months. The September Consumer Price Index report was released Oct. 14 at 8:30 a.m. ET (12:30 p.m. UTC).

The Federal Reserve raised its federal funds target range by 25 basis points on Sept. 16, to 3.75%–4.00%. The increase was the Fed’s first since 2023, and its statement was issued at 2 p.m. ET (6 p.m. UTC).