KOSPI Rebounds 1.37% as Samsung and SK Hynix Recover Ground Lost Ahead of the Fed's Pivotal Rate Decision

SEOUL — South Korea's benchmark KOSPI index climbed 1.37% to 6,717.89 by the close of trading Wednesday, adding 90.63 points, as heavyweight chipmakers Samsung Electronics and SK Hynix recovered ground following a volatile stretch of trading earlier in the week, with investors positioning ahead of the U.S. Federal Reserve's closely watched interest rate decision.

Wednesday's rebound follows one of the more turbulent weeks South Korean equities have experienced in recent months. The KOSPI fell 1.76% to close at 6,909.91 last Friday, then tumbled a further 3.26% on Monday as the index opened down more than 3% amid escalating tensions in the Middle East and a hotter-than-expected U.S. inflation reading that pushed the probability of a Federal Reserve rate hike priced into futures markets to 86% from 69%. The index continued lower Tuesday, slipping 0.85% to close at 6,627.26, weighed down by continued institutional selling in Samsung Electronics and SK Hynix even as the broader Nikkei 225 in neighboring Japan showed relative resilience over the same stretch.

The renewed pressure on South Korean chipmakers traces back to a broader global reassessment of artificial intelligence infrastructure spending that has rattled technology stocks over the past week, following a widely discussed essay from a prominent AI company executive calling for a slower pace of frontier AI model development. That debate has weighed particularly heavily on Samsung Electronics and SK Hynix, which together account for roughly half of the KOSPI's total market capitalization, making the broader index unusually sensitive to shifts in sentiment toward the two companies specifically.

Compounding the volatility, the U.S. 10-year Treasury yield climbed above 5% this week, reaching its highest level in years, as markets priced in a widely expected interest rate increase from the Federal Reserve at the conclusion of its policy meeting Wednesday. Rising Middle East tensions have added a further layer of pressure on markets, with oil prices remaining elevated after an attack on Saudi Arabian pipeline infrastructure and continued disruption in the Strait of Hormuz. A planned meeting between Iranian and Gulf state officials aimed at establishing safer shipping routes through the strait was postponed without a new date set, extending uncertainty over the region's energy supply outlook. KB Securities analyst Ahn So-eun said the postponement had left crude markets on edge even as prices stabilized somewhat. "Oil price gains have paused, but upward pressure remains after the meeting on the Strait of Hormuz was postponed," Ahn said.

Despite those........

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