Japan and South Korea Equities Plunge as AI Optimism Cools; SK Hynix Records Historic Intraday Drop

On Tuesday, equity markets in Japan and South Korea experienced a significant downturn as cooling optimism surrounding the artificial intelligence sector triggered a massive sell-off in semiconductor stocks. The Nikkei 225 fell over 4%, reaching its lowest level since May 22, while South Korea’s KOSPI plunged 8%, triggering a 20-minute circuit breaker. According to reports, SK Hynix suffered a record 30% intraday drop, contributing to a $470 billion market capitalization wipeout across the sector over the past month. Analysts from Nomura Asset Management and Fibonacci Asset Management Global cited heightened credit risks associated with NVIDIA-linked deals and concerns over the sustainability of AI infrastructure spending. With SK Hynix scheduled to report earnings on Wednesday and major U.S. tech firms like Meta Platforms due later this week, market participants remain cautious amid crowded positioning and rising competitive threats from China.