South Korea's KOSPI crashes 22% then rallies on AI chip earnings FAST-MOVING

KOSPI leveraged ETFs Samsung Electronics SK Hynix AI chip rally

In July 2026 South Korea’s benchmark KOSPI index fell about 22 percent, the steepest monthly decline since the 2008 global financial crisis. The slide was driven by extreme volatility in a market dominated by semiconductor giants Samsung Electronics and SK Hynix, a wave of leveraged‑ETF trading, and concerns that AI‑chip demand was weakening. Four circuit‑breaker halts were triggered as 30‑day volatility hit 97.13 percent, the highest level since 1990. Retail investors blamed the leveraged ETFs, called the market a “casino” and said they would avoid equities in the future.

A sharp rebound followed when Microsoft’s earnings beat expectations and highlighted AI‑chip profitability. Samsung shares jumped roughly 21 percent and SK Hynix rose about 24.6 percent, lifting the KOSPI by as much as 14 percent in a single session. Morgan Stanley upgraded South Korean equities to overweight, setting a 9,000 target for the index, and analysts noted that the forced sell‑off of leveraged positions had removed a source of fragility. Meanwhile, South Korea’s semiconductor exports surged 179 percent year‑on‑year in July, underscoring the sector’s resilience despite the market turbulence.

Entities: KOSPI · KOSPI · Microsoft · Morgan Stanley · SK Hynix · Samsung Electronics · South Korea · South Korean retail investors

Claims

What the coverage asserts, and how well corroborated each claim is across sources.

[○ 1 SOURCE] Samsung warned that a global chip supply shortage could persist until 2028. (a7db3513-e02d-405d-936f-984bf18f95c5)
[● 3 SOURCES] Samsung Electronics reported operating profit growth of roughly 1,800% year‑on‑year in the quarter. (c283d61d-1cce-4984-b60d-a8829b63b5ec)
[● 5 SOURCES] KOSPI fell 22.2% in July, the steepest monthly decline since the global financial crisis of 2008. (c283d61d-1cce-4984-b60d-a8829b63b5ec)
[● 2 SOURCES] Retail investors blamed leveraged exchange‑traded funds for the extreme volatility and many vowed not to invest again. (0b446bf2-3c40-4518-aae9-360584d229dd)
[● 2 SOURCES] SK Hynix posted a six‑fold increase in operating profit, a 557% rise year‑on‑year. (c283d61d-1cce-4984-b60d-a8829b63b5ec)
[● 2 SOURCES] Circuit‑breaker halts were triggered four times in July as the KOSPI’s 30‑day volatility reached 97.13 percent, the highest since 1990. (0b446bf2-3c40-4518-aae9-360584d229dd)
[○ 1 SOURCE] Microsoft’s earnings beat expectations, prompting a 14% rise in the KOSPI on AI‑chip stock rally. (719d4942-b852-4857-a113-80a1a2de0398)
[○ 1 SOURCE] South Korea’s semiconductor exports rose 179% year‑on‑year in July. (a7db3513-e02d-405d-936f-984bf18f95c5)
[● 2 SOURCES] Retail investors blamed leveraged exchange‑traded funds for the market turmoil and said they would avoid equities. (0b446bf2-3c40-4518-aae9-360584d229dd, 97919bc0-87eb-411e-bc10-15b414322d2d)
[● 2 SOURCES] SK Hynix fell about 21 percent in July then rose about 24.6 percent during the rebound. (0b446bf2-3c40-4518-aae9-360584d229dd, 719d4942-b852-4857-a113-80a1a2de0398)
[● 3 SOURCES] The KOSPI fell 22 percent in July 2026, the steepest monthly decline since the 2008 global financial crisis. (0b446bf2-3c40-4518-aae9-360584d229dd, e8f62c8a-ffb3-48c0-bc96-8966c25fa08d, 7b7e4914-c2a6-4e54-b161-fe1d7cf20549)
[● 2 SOURCES] Microsoft’s earnings beat expectations, boosting AI‑chip stocks and helping the KOSPI rally up to 14 percent. (719d4942-b852-4857-a113-80a1a2de0398, 0b446bf2-3c40-4518-aae9-360584d229dd)