Kospi closes down 7.57% as chip losses and renewed U.S. rate fears weigh

Key Facts

South Korea's Kospi closed the 15 October 2026 session down 7.57% at 5,554.22 points, according to Reuters, as a selloff in chip stocks coincided with renewed fears of U.S. interest rate increases. The index recorded its lowest close in 6 months, under pressure from U.S. inflation, concerns over artificial intelligence investments and Chinese competition in memory chips. It fell as much as 9.29% during trading before paring some losses by the close. A circuit breaker triggered a 20-minute trading halt during the session, according to Reuters. The developments followed a higher-than-expected U.S. inflation reading that revived concerns over monetary tightening, according to Investing.com, as selling in the semiconductor sector continued.

Among Korean stocks at the close, Samsung Electronics fell 9.5%, according to Reuters, as pressure spread across chipmakers. SK Hynix posted a steeper closing loss of 11.1% in a session marked by sharp selling in the Korean market. The declines in both companies coincided with net foreign selling of Korean shares totaling 3.6 trillion won. That was equivalent to $2.68 billion, according to the value Reuters reported for foreign flows during the 15 October session. The outflow from Korean equities came as concerns over the path of U.S. interest rates coincided with pressures specific to the memory sector and spending on artificial intelligence infrastructure, according to the catalysts cited by Investing.com.

The Asian selloff followed losses in the U.S. market, where the Nasdaq Composite fell 1.9% in the 14 October session, according to Investing.com. In the chip sector, the Philadelphia Semiconductor Index extended its decline to 6 consecutive sessions before Asian trading began. The Korean slump thus came against a backdrop of sustained selling in U.S. chip stocks, alongside local pressures evident in Samsung and SK Hynix shares. Investing.com linked the decline in Asian equities to an intensifying chip selloff following higher-than-expected U.S. inflation. The website cited concerns over the valuations and returns of artificial intelligence investments, as well as Chinese competition in memory chips, among the drivers of selling.

U.S. Bureau of Labor Statistics data showed annual inflation accelerated to 3.7% in September, compared with a 3.4% increase in August. The reading exceeded expectations of 3.6%, according to The National, adding an upside surprise to the price comparison with the previous month. On a seasonally adjusted monthly basis, the consumer price index rose 0.6% in September, following a 0.4% increase in August. Gasoline was a prominent driver of the increase, with its index rising 9.1% during the month, according to the Bureau of Labor Statistics. Higher gasoline prices accounted for more than half of the monthly increase in the headline consumer price index. Core inflation, which excludes food and energy, stood at 2.6% year on year in September. The higher-than-expected inflation figures brought fears of U.S. interest rate increases back into trading, according to Investing.com.

On competition within the chip sector, Investing.com reported that China's CXMT had made progress in dynamic random access memory design. The website described the design as "higher density," allowing it to store more data, a development that added to concerns over Chinese competition. Meanwhile, a warning from Broadcom Chief Executive Hock Tan about the behavior of some artificial intelligence investors added to concerns over sector valuations. The concerns also encompassed whether massive spending on artificial intelligence infrastructure could generate adequate returns, according to the website. Investing.com summed up this concern as "whether heavy infrastructure spending will generate adequate returns." These investment concerns combined with developments in Chinese memory design to form the backdrop to the selloff in semiconductor companies.

The next U.S. monetary policy meeting is scheduled for 27 and 28 October 2026, according to the Federal Reserve's schedule for the Federal Open Market Committee meeting. The meeting includes a press conference, according to the central bank's schedule. It will be followed by the release of U.S. consumer price data for October, scheduled for publication on 10 November 2026. The Bureau of Labor Statistics set the release time at 8:30 a.m. U.S. Eastern Time. The October release follows September's reading, which combined accelerating annual inflation with a monthly rise in prices and brought fears of interest rate increases back into the backdrop of the market selloff, according to Investing.com.