South Korea Halts Trading for 20 Minutes as Global Tech Selloff Spreads on Hot U.S. Inflation
South Korea's benchmark stock index fell 7.57% on Thursday, triggering a circuit breaker that halted trading for 20 minutes, as doubts about AI spending joined sticky U.S. inflation in a worldwide rout of technology shares. The selloff followed Wednesday's 1.1% drop in the S&P 500, its worst day since July.
South Korea’s stock market suffered its worst session in years on Thursday, and the benchmark KOSPI fell 7.57% to 5,554.22 — its lowest close since April 7, according to Reuters.
The index fell as much as 9.29% during the session, tripping a circuit breaker that halted trading for 20 minutes, the first such halt since July 29. It was the 10th circuit breaker activation on the KOSPI this year and the 16th in its history. The drop marked the seventh straight down session, the longest losing streak since September 2024.
The damage centered on chipmakers. Samsung Electronics fell 9.5% and SK Hynix lost 11.1%, after the Philadelphia Semiconductor Index dropped 4.3% overnight. Foreign investors were net sellers of Korean shares for an eighth straight session, according to market coverage of the session.
Hot inflation, then doubts about AI spending
The selloff began with Wednesday’s U.S. inflation report, which showed consumer prices rising faster than expected — headline CPI up 0.65% on the month and core CPI at 0.335% against a 0.2% forecast, with the annual rate at 3.7%. The report briefly pushed the odds of a Federal Reserve rate hike in October above 50%. The S&P 500 fell 1.1% on Wednesday, its worst day since July, while the Nasdaq 100 lost 2% and the semiconductor index fell for a sixth straight session, according to ZeroHedge’s overnight market wrap.
By Thursday morning, the driver had shifted from inflation fears to doubts about the artificial intelligence investment boom. Anthropic’s third-quarter revenue of $16.8 billion implied slowing growth, and a Gartner report warning that $3.5 trillion in AI infrastructure spending could face impairment by 2030 circulated among traders, ZeroHedge reported. CoreWeave’s five-year credit-default swaps closed at 1,118 basis points on Wednesday, and its bonds due 2032 traded below 78 cents on the dollar.
The selloff spread across Asia: Japan’s Nikkei sank 4.9%, its worst day since March; Taiwan’s Taiex fell 3.4% on about $9.3 billion in foreign selling, a record; and the MSCI Asia Pacific Index fell as much as 3.3%. The 10-year Treasury yield tumbled about 10 basis points to 5.08%, its lowest since Sept. 23, as investors moved into safe assets. October Fed hike odds fell back to about 30% from the post-CPI intraday peak of 58%.
What comes next
Traders turn now to a packed U.S. economic calendar on Thursday — September retail sales, producer prices, manufacturing surveys and weekly jobless claims — along with remarks from Fed officials, including Goolsbee and Hammack. Fed Chair Kevin Warsh is scheduled for a fireside chat with the IMF’s Georgieva in Bangkok at 11:30 p.m. ET, his last public appearance before the central bank’s pre-meeting blackout, according to ZeroHedge.
Reporting based on coverage by Reuters and ZeroHedge.
