South Korea's Kospi Index Plunges 10.8% as AI-Related Chip Stocks Face Heavy Selling
South Korea's Kospi index fell 10.8% on Tuesday, driven by a significant sell-off in computer chipmaking stocks. The decline was fueled by investor concerns regarding a potential artificial intelligence bubble and increasing competition from Chinese chipmakers. Major tech firms, including Samsung Electronics and SK Hynix, saw shares drop by more than 13% each, leading to the Korea Exchange triggering circuit breakers to manage the panic selling. This slump follows a period of high volatility in the South Korean market, which has attracted a large number of retail investors. The sell-off also impacted other Asian markets, with Japan's Nikkei 225 closing nearly 4% lower. In the United States, chip giants like Nvidia and AMD also experienced significant losses, allowing Apple to briefly overtake Nvidia as the world's most valuable listed company. Investors are now monitoring the Federal Reserve's upcoming rate decision while bracing for a week of mega-cap earnings reports from companies such as Amazon and Microsoft.