Emerging-market stocks experienced their longest losing streak in nearly two months, falling for a third consecutive session on September 14, 2026. This decline was primarily driven by escalating tensions in the Middle East, which prompted investors to seek safer assets, and persistent uncertainty surrounding global interest rate outlooks. The MSCI gauge of developing-nation equities registered this significant drop.
A major contributing factor to the market downturn was the technology sector, particularly in Asia. South Korea's Kospi index slid more than 3% after prominent AI firms, including Anthropic's CEO Dario Amodei, and backed by figures like Elon Musk of xAI and Sam Altman of OpenAI, called for a deceleration in artificial intelligence development. This raised concerns about a sector that had been a key driver of market rallies earlier in the year, with companies like Samsung Electronics and SK Hynix experiencing declines of 4.1% and 6.4%, respectively. Analysts from Deutsche Bank noted this as a clear acknowledgement from within the industry that the pace of AI advancement might need limits, prompting questions about the future of the AI investment cycle.
Further pressure on emerging markets came from elevated oil prices and the anticipation of interest rate hikes. Hostilities in the Middle East led to a rise in oil prices, with Brent crude jumping 3.5% to over $108 a barrel, intensifying inflationary worries. Markets priced in a near 90% chance of a U.S. Federal Reserve interest rate hike this week, with some economists, like JPMorgan's Michael Feroli, expecting two hikes this year. This combination of geopolitical instability, oil price surges, and looming rate increases created a challenging environment for risk assets, leading to a 1.2% fall in MSCI's emerging-markets stock index to a near two-week low and a 0.1% ease in its EM currency index.
