Volatility has returned to the stock market, and AI is once again the culprit. A mild US tech sell-off Monday carried over into Asia Tuesday, with the Kospi index in South Korea tumbling 10% and tripping a circuit breaker that led to a 20-minute cooling-off session.
Market Analysis
SK Hynix and Samsung, two of the world’s leading memory chipmakers, tumbled more than 12%, dragging the rest of South Korea’s stock market down with them. Traders’ fear isn’t about anything specific, and there wasn’t any obvious catalyst to lead to such enthusiastic selling.
Some market analysts pointed to Google and SpaceX falling somewhat sharply Monday. Google’s 5% decline was mostly because of a high-profile AI leader defecting to Anthropic, and SpaceX has some post-IPO jitters that are typical for companies whose stocks boom right out of the gate.
Other analysts suggested the markets were reacting to the likelihood that the Federal Reserve may raise interest rates later this year. The Kospi is up 90% this year, so when the wind blows in an unexpected direction, it can lead traders – and, often more consequentially, trading algorithms – to head for the exits.
Original reporting: El Paso News (HLL/CB) — read the source article.
