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Asia Leads Losses as AI Frenzy Ebbs
Doubts about the payoff from AI spending hit Asian chip stocks hardest, and possible December rate increases keep the bar high for a return of inflows.
Kenan Machado · 5 November 2026 · 13 min read
Foreign investors pulled $33.8 billion out of emerging-market stocks and bonds in October, the most since March, with the selling concentrated in Asian chip stocks. The outflow followed withdrawals of $19.3 billion in September. To put the reversal in context, in October of last year, the same category saw some $27.4 billion of inflows.
Stocks accounted for almost all of it, at $31.7 billion, and emerging Asia accounted for $28.3 billion of that, according to the Institute of International Finance (IIF), a financial-industry trade group, which tracks these monthly flows.
The selling came amid a drop in U.S. Treasury yields and rising yields in Japan, a provider of cheap capital to the world. According to the IIF, the numbers point to a cooling of risk appetite for stocks, along with country-specific shocks, rather than a squeeze on dollar funding.
Taiwan and South Korea suffered the most as speculators betting on the buildout of artificial intelligence (AI) took profits. Spending on AI infrastructure and data centers could reach anywhere from $3 trillion to $7 trillion globally by 2030, according to estimates by Oxford Economics and PwC.
