Highlights

• Japan's Nikkei 225 dropped 2%.
• South Korea's KOSPI plunged 4%, triggering a rare circuit breaker halt.
• Tech stocks crashed across Asia.
• Semiconductor giants led the selloff:
  • SoftBank (-10%)
  • Samsung (-4%)
  • SK Hynix (-5%)
• Valuation concerns and Michael Burry's bearish bets contributed to the decline.
• Surging U.S. dollar rose above 100.
• Fading Fed rate cut expectations added pressure.
• First synchronized correction in Asian tech exporters since 2022.

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Panic rippled across Asian markets this morning as Japan and South Korea saw their stock indices crater in a region-wide rout led by technology shares. The Nikkei 225 plunged more than 1,300 points (−2%), while South Korea’s KOSPI tumbled over 4%, triggering a rare “sidecar” trading halt — a circuit breaker designed to pause algorithmic sell orders for five minutes. It was the first such intervention since April.

Tech Stocks at the Eye of the Storm

The selloff mirrors last night’s U.S. tech correction, with semiconductor and AI-linked equities under pressure globally. In Tokyo, SoftBank Group slumped more than 10%, its steepest drop since October, while Advantest fell 8%. In Seoul, Samsung Electronics slid over 4% and SK Hynix dropped more than 5%.

Analysts blame a toxic combination of valuation fatigue and a resurgent dollar. After months of AI-driven exuberance, investors are cashing out of overextended chip and software names. Hedge fund icon Michael Burry (of The Big Short fame) reportedly disclosed new bearish positions on Palantir and NVIDIA, adding fuel to fears of a broader correction.

Wall Street’s warning tone has also seeped into Asia: Goldman Sachs CEO David Solomon predicted a potential 10–20% equity pullback within two years, echoed by Morgan Stanley’s Ted Pick, who described a 10–15% reset as “healthy.”

The Dollar’s Dominance Returns

The U.S. dollar index surged above 100 for the first time since August, pressuring Asian exporters and high-growth tech names sensitive to global capital flows. The strength stems from divisions within the Federal Reserve and fading expectations of a December rate cut — odds have fallen from 94% to 69%, according to CME FedWatch.

Meanwhile, political dysfunction in Washington has compounded volatility. The U.S. government shutdown entered its 35th day, tying the record for the longest in history. The Congressional Budget Office warned it could shave 1–2 percentage points off Q4 GDP, adding uncertainty to Fed policy decisions.

A Warning Shot for Global Tech Bulls

The Asian crash is not an isolated tremor — it’s the first synchronized correction across U.S., Japanese, and Korean tech since 2022. With the yen and won sliding, and AI valuations stretched to extremes, the selloff may mark the beginning of a sentiment reset. For Western investors, today’s rout is a reminder: the “AI supercycle” rests on fragile monetary and political foundations.

Disclaimer: This summary (opens in a new tab) is based on reporting from 券商中国 (Securities Times China), a state-affiliated financial outlet. Information should be independently verified before forming investment conclusions.

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