China Tech Stocks Slump as AI and 5G Sell-Off Intensifies

Key Facts

The ChiNext Composite fell 3.6% and the STAR50 slid 4.2% amid heavy selling in the AI and 5G sectors. Reuters reported that these sharp declines occurred despite the Federal Reserve's decision to hold interest rates steady, with a CSI 5G communications gauge dropping 6.1%.

The decline reflects a continuing deflation of the AI bubble in China and localized selling pressure that outweighed global sentiment. The Federal Reserve held interest rates at 4% on October 28, 2026, a day that also saw the US goods trade balance report a deficit of $134.9 billion.

Market participants are looking ahead to the release of China's Non-Manufacturing PMI on October 31, 2026, which will provide further insight into service sector performance amid the current volatility in technology stocks.