South Korea’s KOSPI index, the darling of global equity markets for most of 2026, just had the kind of two-day stretch that makes financial advisors lose sleep. The benchmark shed roughly $2.18 trillion in market value across July 28 and 29, with an intraday plunge of up to 12.6% before settling for a “mere” 6% loss on the second day. The day before that, it dropped nearly 11%.
What happened, and why it matters beyond Seoul
The catalyst was the AI trade unwinding. Samsung Electronics and SK Hynix, two of the world’s largest semiconductor manufacturers, led the decline as enthusiasm for AI-related chip stocks evaporated.
The KOSPI is now sitting nearly 40% below the peak it reached just over a month ago. For a market that was up 41.5% year-to-date in US dollar terms as of July 29, making it the best-performing major equity market of 2026, that’s a staggering reversal.
Circuit breakers, designed to pause trading during extreme volatility, have been triggered multiple times throughout 2026.
