South Korea’s KOSPI plunges 6% as chipmakers drag, while geopolitical risks and Fed policy weigh on regional equities.
Asian stocks fell sharply on Tuesday, led by a 6% drop in South Korea’s KOSPI, as investors took profits after a recent AI-driven rally and reacted to declines in US tech shares. Heavyweight chipmakers drove the losses, extending a pullback from weeks of outsized gains.
Japan’s Nikkei 225 and Hong Kong’s Hang Seng declined over 1%, reflecting broader caution. Markets also weighed mixed signals on US-Iran negotiations, with Tehran denying new nuclear inspection commitments despite US claims of progress. Geopolitical risks persisted as Iran asserted control over the Strait of Hormuz.
The Federal Reserve’s hawkish stance last week added pressure, lifting expectations for a near-term rate hike. Futures markets now price in a higher probability of tighter policy, further dampening sentiment.