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Kospi returns to near prewar levels as investors adapt to 'TACO trade'

Published: 15 Apr. 2026, 17:54

Stock prices for SK hynix and Samsung Electronics are displayed on an electronic board in the dealing room of Hana Bank’s headquarters in Jung District, central Seoul, on April 15. [YONHAP]

Korean stocks have rebounded to near prewar levels as investors increasingly brush off geopolitical shocks from the ongoing conflict in the Middle East.

The benchmark Kospi rose 123.64 points, or 2.07 percent, to close at 6,091.39 on Wednesday, approaching the 6,200 level seen before the outbreak of hostilities.

The index has climbed roughly 21 percent since March 31, when the United States and Iran first signaled their willingness to end the conflict.

The recovery of the index comes after weeks of volatility driven in part by remarks from U.S. President Donald Trump, whose volatile rhetoric had repeatedly rattled markets.

But analysts say investors are becoming desensitized to such swings, suggesting geopolitical risk is increasingly being treated as a constant rather than a destabilizing shock.

Wall Street, meanwhile, has already moved past prewar levels.

The S&P 500 closed at 6,967.38 on Monday, surpassing its late-February level and edging closer to an all-time high, while the Nasdaq composite has extended gains for 10 consecutive sessions, its longest winning streak since November 2021, led by a surge in semiconductor stocks.

In Seoul, chipmakers have driven much of the recent rally. Shares of SK hynix hit an intraday record high on Wednesday, while Samsung Electronics climbed toward its previous peak.

Some analysts point to what has been dubbed the “TACO trade” — short for “Trump Always Chickens Out” — to explain the market’s resilience.

The theory holds that investors have grown accustomed to sharp rhetoric followed by de-escalation, muting the impact of geopolitical headlines.

“While the TACO dynamic still holds, its influence has diminished as it has been repeated so often,” said Lee Kyung-min, an analyst at Daishin Securities.

That pattern was evident over the weekend, when news of stalled ceasefire talks briefly unsettled markets before losses were pared. The S&P 500 ended the session up about 1 percent after hovering near flat earlier in the day, while the Kospi recovered from most of its intraday decline.

The broader trend suggests investors are increasingly willing to look past geopolitical tensions and focus instead on corporate fundamentals. Bloomberg noted that despite the lack of a clear end to the Iran conflict, market participants appear to be tuning out war-related developments.

Still, some caution that further gains may be limited without tangible progress toward a ceasefire. Mark Hackett, chief market strategist at Nationwide, said it may be difficult for equities to reach new highs absent clear signs of a negotiated settlement.

“Until there is meaningful progress toward a deal, it’s hard to see markets breaking to fresh records,” he said. “But with solid fundamentals and reset expectations, there is still room for upside.”

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.
BY JANG SEO-YUN [[email protected]]