South Korea's Kospi closed 10.8% lower at 6,023.66 after trading was temporarily halted during a semiconductor-led selloff. Samsung Electronics fell 13.4% and SK Hynix lost 14.7%, turning concern about artificial-intelligence valuations and Chinese competition into one of the sharpest national-market corrections of the current technology cycle.
The pressure crossed the Pacific but did not produce a uniform decline in the United States. The S&P 500 slipped 0.2% in early trading and the Nasdaq lost 0.7%, while the Dow Jones Industrial Average gained 283 points. Micron Technology fell more than 7%, showing that a modest index move concealed a large rotation away from chipmakers and toward other sectors.
Valuation had made the semiconductor complex vulnerable. Many AI-linked stocks had doubled or tripled since the start of the year, while SK Hynix's U.S.-traded shares closed Monday at $143, below the $149 price of their Wall Street listing earlier in July. The correction therefore tests recent financing benchmarks as well as public-market enthusiasm.
China provided the immediate competitive catalyst. Memory-chip maker CXMT rose 466% in its Shanghai debut after raising at least $8.6 billion, although it fell 4% the following session. A separate report that China had begun mass-producing domestic deep-ultraviolet lithography tools intensified concern that local equipment and chip suppliers could weaken the market position of global leaders.
The selloff spread through Asia's technology supply chain. Japan's Nikkei 225 dropped 4%, Taiwan's Taiex fell 4.7% and TSMC declined 3%. The impact was not universal: Hong Kong's Hang Seng added 0.4%, the Shanghai Composite lost 1.2%, Australia's benchmark rose 0.6% and India's Sensex edged only slightly lower.
Energy offered a different signal. Brent crude fell $1.35 to $84.52 a barrel and U.S. crude declined 81 cents to $81.80 as the United States and Iran paused strikes and mediators pushed renewed negotiations. Oil remains above the roughly $72 level seen before the war began, but the decline eased immediate pressure on inflation-sensitive assets.
Outside semiconductors, company-specific news supported U.S. equities. Johnson & Johnson rose 3% after agreeing to a $5.5 billion settlement of remaining ovarian-cancer claims, conditional on participation by at least 95% of claimants. Coca-Cola gained 4.5% after beating sales and profit expectations, while UPS advanced about 1% after its results.
The market now needs evidence to distinguish a valuation reset from a structural repricing. The decisive tests are chipmakers' earnings and capital-spending returns, the commercial progress of Chinese equipment and memory suppliers, and whether SK Hynix can recover its listing price. Oil negotiations may soften the macro backdrop, but they do not resolve the competitive questions inside the AI supply chain.
