South Korea’s stock market plunged on Monday, with the benchmark KOSPI falling around 9% and triggering a 20-minute trading halt, as renewed U.S.-Iran fighting over the Strait of Hormuz collided with a sharp reversal in the country’s AI-driven chip rally.
The selloff had two main triggers. Oil prices jumped after Iran again claimed the Strait of Hormuz was closed and regional tensions widened across the Gulf, alarming Asian economies that depend heavily on stable energy flows. At the same time, SK Hynix, South Korea’s leading AI memory chipmaker, fell more than 15% in Seoul after its much-anticipated Nasdaq ADR debut on Friday prompted profit-taking and fresh questions about whether the AI trade had become overstretched.
Bloomberg described the SK Hynix collapse as underscoring growing investor concerns that the AI boom has become overstretched.
Combined, SK Hynix and Samsung Electronics lost $290 billion in market value in a single session. Japan’s Nikkei fell 1.5%, gold dropped more than 1% and the dollar strengthened as investors moved into safer assets. All eyes now turn to Tuesday, when US inflation data and Federal Reserve Chair Kevin Warsh’s testimony to Congress will either calm or deepen the market’s anxiety.
