Markets Selloff: Korean Stocks Fall 10% From Record

Summary

South Korean stocks plunged 10% from a record, driven by chip heavyweights. Bloomberg's Neil Campling explained that a report of SK Hynix shifting capacity from high-margin HBM to commodity DRAM sparked fears about AI demand, dragging Nasdaq futures and putting pressure on Micron ahead of earnings. He also noted a rotation dynamic where Magnificent Seven stocks are being used to fund semiconductor purchases, and highlighted declining token prices causing companies like AT&T and Uber to curb spending.

• Kospi index fell 10% from record, with trading suspended for 20 minutes.
• Local Korean press reported SK Hynix moving capacity from HBM AI chips to commodity DRAM.
• The shift raised investor concerns about AI demand sustainability and margin pressure.
• Nasdaq futures fell sharply, and Micron's upcoming earnings face increased pressure.
• Momentum names and AI baskets are up triple digits year-to-date, suggesting stretched positioning.
• Magnificent Seven stocks are being sold to fund semiconductor purchases, indicating a rotation.
• Token prices declining from highs, prompting AT&T and Uber to slow employee token spending.