World's hottest stock market rallies after 10% plunge

By Jamie Chisholm

Chip makers Samsung and SK Hynix recover some ground after bout of profit taking

SK Hynix's shares have been riding the memory-chip wave

South Korean investors bought the dip Wednesday, as the world's hottest stock market recovered some ground after a 10% plunge that rattled the global tech sector.

The Kospi Index KR:180721 in Seoul rose 3.3%, amid a broad bounce and a partial rebound in popular technology plays that have help push the market up more than 100% so far this year - the best of the globe's bourses. The S&P 500 SPX, by comparison, is up 7.6% in 2026.

The previous session's double-digit slump for the Kospi came after shares of chipmakers Samsung Electronics (KR:005930) and SK Hynix (KR:000660) dived around 12% apiece as investors suffered a bout of nerves over rich valuations and regulators warned about the risk of highly leveraged exchange traded funds exposed to the sector.

Samsung rose 3.7% Wednesday, but SK Hynix recovered just 1.1%.

Samsung and SK Hynix, which at times in recent weeks made up 50% of the Kospi's market capitalization, have surged about 184% and nearly 300% respectively just this year as investors bet that demand for the companies' chips will continue to grow as AI data-center spending increases.

Tuesday's dive in the South Korean memory-focused chip stocks rattled peers in the U.S., with Micron Technology (MU) and Sandisk (SNDK) each diving by at least 13% - a rout that infected the broader semiconductor sector and left the tech-heavy Nasdaq Composite down 2.2%.

U.S. traders were also wary about how the market may now react to Micron's earnings, due after Wednesday's close, with little room for disappointment given the shares, even with Tuesday's dive, are up 727% over the last 12 months.

"South Korean retail traders have been piling into ETFs nearly as aggressively as U.S. traders, so a rebound here into tomorrow's Micron earnings is thought to be somewhat important, and the more the iShares MSCI South Korea ETF and many U.S. semiconductor stocks can rally into MU's earnings on Wednesday, the better," said Mark Newton, technical strategist at Fundstrat.

Patrick Munnelly, strategist at Tickmill. said: "When AI enthusiasm was strongest, investors treated semiconductor pullbacks as buying opportunities,"

"Now, with positioning crowded and valuations stretched, the market wants confirmation that demand is still accelerating. Micron's commentary on long-term supply agreements, pricing power and upfront customer payments will therefore carry more weight than usual," Munnelly added.

Micron shares were up 3% and Sandisk's up nearly 2% in Wednesday's premarket action.

-Jamie Chisholm

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

06-24-26 0414ET