South Korea’s benchmark KOSPI index briefly halted trading on Wednesday after plummeting 5.2% to 6,515.97, led by steep losses in chip giants SK Hynix and Samsung Electronics as a global selloff in artificial-intelligence stocks deepened.
SK Hynix, the world’s leading memory chipmaker, tumbled 7.9%, while Samsung Electronics shed 6.9%. The two companies have been among the biggest beneficiaries of the AI boom, and their declines tracked losses among their U.S. rivals overnight.
The sharp drop triggered a temporary circuit breaker on the exchange, a mechanism designed to pause trading and curb panic selling during extreme volatility. The rout underscored how tightly South Korea’s chip-heavy market has become bound to the fortunes of Wall Street’s technology sector.
The selloff rippled across Asian markets. Tokyo’s Nikkei 225 sank 2.6% to 65,703.78, while the Shanghai Composite lost 1.5% to 3,927.70. Taiwan’s Taiex fell 1.4% and Hong Kong’s Hang Seng slipped 0.4% to 25,382.66. Australia’s S&P/ASX 200 edged down 0.4% to 9,083.70.
The regional retreat followed a weak session on Wall Street, where the S&P 500 fell 0.7% for a third consecutive modest loss. The Dow Jones Industrial Average dipped 0.2%, while the tech-heavy Nasdaq composite sank 1.3%.
Stocks that surged during the AI rally have led the recent decline, swinging sharply throughout the summer amid concerns that valuations have climbed too high and that demand for memory, processors and other data-center components could weaken.
Compounding the pressure, rising oil prices clouded market sentiment. Brent crude, the international benchmark, surged 0.9% to $91.83 per barrel, while U.S. benchmark crude gained 1% to $84.88 per barrel.
Crude prices have been volatile amid uncertainty over whether the United States and Iran can reach a deal to allow oil tankers to exit the Persian Gulf freely. Brent traded at $72.87 per barrel before the outbreak of conflict in the region.
The latest downturn marks a reversal for the KOSPI, which had recently entered a bull market on the strength of a chip rally. The index’s swings reflect the outsized weight of Samsung and SK Hynix, whose combined performance can move the broader market on any given session.
Investors now face a period of heightened uncertainty as questions over AI valuations and energy costs converge. Markets across the region are expected to remain sensitive to developments on Wall Street and in the Persian Gulf in the days ahead.