Kospi figures are shown on a digital board in Hana Bank main branch in Jung District, central Seoul, on Oct. 15. The Kospi fell more than 7 percent, as major chipmakers extended losses amid growing concerns over the sustainability of investments related to artificial intelligence (AI) and rate hikes by the Federal Reserve.WOO SANG-JO
Stocks plunged more than 7 percent Thursday, as concerns about a supply glut from Chinese chipmakers, doubts about returns on AI investments and the prospect of another U.S. rate hike weighed on investor sentiment. The drop triggered sell-side trading curbs, locally known as sidecars, on both the Kospi and the Kosdaq.
After opening 5.59 percent lower, the benchmark index extended its losses, tumbling 454.59 points, or 7.57 percent, to end at 5,554.22, after dipping as low as 5,450.81. Falling for the seventh consecutive session, Kospi marked its longest losing streak since September 2024.
The tech-heavy secondary Kosdaq opened 4.79 percent lower at 784.45 and continued to slide to close at 757.81.
The sidecars, which temporarily halt program selling, were activated at 9:07 a.m. on the Kospi and 9:12 a.m. on the Kosdaq. It was the first time sell-side sidecars were triggered on both markets on the same day since July 29, about 11 weeks ago.
As losses deepened, the bourse operator activated a circuit breaker at 12:38 p.m., halting trading on the main bourse for 20 minutes after the Kospi dropped more than 8 percent from the previous session's close.
Foreign investors sold a net 3.62 trillion won ($2.7 billion) of shares, extending their net-selling streak to eight sessions, while retail and institutional investors bought a net 1.69 trillion won and 1.29 trillion won, respectively.
Chipmakers led the decline. Market bellwether Samsung Electronics plunged 9.48 percent to 210,000 won, and SK hynix tumbled 11.06 percent to 1.26 million won.
A display board shows the Kospi, Kosdaq and won-dollar exchange rate at Hana Bank's headquarters in Jung District, central Seoul, on Oct. 15.YONHAP
The sell-off came as worries about expanded memory chip supply from China’s CXMT compounded doubts about the profitability of AI investment. In New York, shares of AI cloud company CoreWeave plunged 15.5 percent on Wednesday as its heavy debt load came into focus, and yields on its corporate bonds jumped to around 15 percent.
Inflation added to the pressure. The U.S. consumer price index rose 0.6 percent on month in September, its fastest monthly increase since April, fueling concerns that persistent inflation could prod the Federal Reserve to raise interest rates.
“Concerns over whether massive AI investment can generate sufficient returns had the biggest impact, as Anthropic’s third quarter revenue growth slowed from the previous quarter,” said Park Yeon-ju, Head of the Research Center at Mirae Asset Securities. However, she added, “With earnings solid, particularly in semiconductors, and stocks having already fallen sharply due to supply and demand factors, the decline in share prices is excessive relative to earnings.”
NAM JUNG-HYUN
“The transition to AI is a path we have never taken, so it is difficult to gauge the future based on past experience,” said Kim Hak-kyun, head of research at Shinyoung Securities. “No matter how much money Samsung Electronics makes, questions about whether those profits are sustainable will inevitably keep being raised.”
Analysts attributed the Kospi's outsize losses, relative to other global markets facing the same headwinds, to deteriorating investor sentiment.
“There is anxiety across global markets, including the United States, about rising long-term real interest rates and the profitability of AI investment, but psychological factors are playing a large role in the particularly sharp fall in the Korean stock market,” said Lee Min-hwan, a professor of finance at Inha University. Expectations had run especially high for chip stocks, he said, so investor anxiety fueled further selling once the market outlook wavered.
“Retail investors are betting on a rebound through exchange-traded funds [ETF] and other products, but unless foreign investors turn to buying, it will be difficult to prop up the market with retail purchases alone,” Lee added.
Retail investors are panicking as the market’s prolonged slide deepens their losses.
“I’d been buying and selling a lot recently, but since a couple of days ago my losses have hit 10 percent, so I can’t even sell,” said an investor who lives in Seongdong District, eastern Seoul. “I’ve lost more than 10 million won in just the past few days.”
An office worker who took out a bank loan to invest in Korean chip stocks said, “My losses have grown so large that it’s hard to cover the loan. I’d like to average down, but I don’t even have the money left to do that.”
On major stock investing forums, many shared their losses and frustration.
Kospi figures are shown on a digital board in Hana Bank main branch in Jung District, central Seoul, on Oct. 15. The Kospi fell more than 7 percent, as major chipmakers extended losses amid growing concerns over the sustainability of investments related to artificial intelligence (AI) and rate hikes by the Federal Reserve.WOO SANG-JO
“I lost 100 million won. Give me my money back, foreigners,” one investor wrote. A retail investor in Samsung Electronics wrote, with a touch of self-mockery, “Samsung Electronics won’t go under. The one going under is me.”
“I bought [stocks] to help cover my retirement living expenses, but I’ve lost 17 percent. I’m scared to even buy more,” another wrote.
Others vented their anger at the government. “If stocks are this bad, shouldn’t the government come up with something?” one post read. Another asked, “Are they running the stock market just to suck the blood out of individual investors?”
Korean retail investors who turned to the U.S. market to avoid the local slump have been hit hard as well. The Direxion Daily Semiconductor Bull 3X Shares, a triple-leveraged semiconductor ETF heavily favored by Korean retail investors, plunged 13.35 percent to close at $110.54 on Wednesday in New York, its steepest daily drop in a month.
A rebound will hinge on easing concerns over AI profitability and stabilizing U.S. long-term interest rates, analysts said.
“It is important whether the utility of AI can be confirmed in Big Tech earnings announcements at the end of October, and whether AI companies’ revenue growth will strengthen again in the medium term,” Park said.
“Right now, interest rates are a clear burden,” Kim said. “U.S. long-term rates need to fall for there to be a change in foreign investors’ selling stance.”
Updated, Oct. 15, 2026: Market- and share-specific detail, information related to investor losses added.
Updated, Oct. 15, 2026: Index- and share-specific detail, reactions from investors added.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
