A wave of selling swept through technology stocks across global markets on Tuesday, with South Korea’s benchmark Kospi index suffering its worst single-day drop of the year after trading was temporarily halted by circuit breakers.
The Kospi slid by 8 percent within minutes of the opening bell, triggering a 20-minute trading halt. When trading resumed, the index continued to fall, closing 10.8 percent lower. The sell-off was led by technology heavyweights Samsung Electronics and SK Hynix, both of which fell by more than 13 percent.
The rout follows a 5 percent decline in Nvidia shares on Wall Street on Monday, which cost the AI chip giant its position as the world’s most valuable listed company. Apple reclaimed the top spot, rising about 25 percent this year as investors gravitated toward the iPhone maker’s relatively restrained approach to AI spending.
The trigger for the sell-off, according to market analysts, was a Wall Street Journal report that Nvidia is in talks to provide about $250 billion for a massive OpenAI data center infrastructure project. The scale of the proposed investment reignited fears that the artificial intelligence boom may be entering a bubble phase, with spending outpacing actual revenue generation.
Jane Sydenham, investment director at Rathbones, said the Asian market slump followed “phenomenal rises” over recent months. She noted that the Korean market in particular is “very concentrated” with heavy investment in Samsung and SK Hynix, and that many Korean retail investors buy stocks with debt, which “exaggerates the movements when we get a correction like this.”
Japan’s Nikkei 225 index, also dominated by technology companies, closed nearly 4 percent lower on Tuesday. The declines extended a global reassessment of tech valuations that began on Wall Street the previous session.
The Kospi has been halted multiple times this year under a stock market mechanism known as a circuit breaker, designed to calm panic selling. The index had more than doubled from the start of the year to mid-June but has since lost around a third of its value.
Cheng Chye Hsern, head of investments at wealth manager Providend, said Apple is one of the few major technology firms “not taking part in the AI race,” making the stock appealing to investors concerned about the billions its rivals are spending on data centers and infrastructure.
The sell-off also hit US-listed shares of SK Hynix, which fell by 7.5 percent to well below the $149 offer price from its record-breaking Nasdaq debut on July 9. SK Hynix had raised $26.5 billion in its New York share offering, the largest ever listing by a foreign firm in the United States.
Analysts said the market turmoil reflects growing investor anxiety about whether the massive capital expenditure required for AI development can deliver commensurate returns in the near term. Tech giants including Microsoft, Google, and Amazon have collectively committed hundreds of billions to AI infrastructure, with Nvidia’s chips powering much of the expansion.
Despite the sharp correction, some fund managers remained cautious about calling the end of the AI rally. Technology stocks have been the primary driver of global equity markets this year, and the underlying demand for chips powering data centers and AI applications continues to grow.
The sell-off in Seoul was the latest reminder of how closely Asian technology markets are tied to the fortunes of a small number of semiconductor manufacturers. South Korea’s two biggest companies, Samsung and SK Hynix, together account for more than a third of the Kospi’s total market capitalization.
