Global stocks fell on Monday, led by a meltdown in South Korea’s tech-heavy index, as investors ditched the artificial intelligence-related companies behind this year’s blistering rally.
A fragile ceasefire in the Middle East also faltered, with Israel and Iran trading strikes, sending oil prices higher on Monday. The international benchmark Brent crude was up 3.9 per cent at $96.72 (€83.82) a barrel.
In South Korea, the benchmark Kospi plunged at the open, triggering a halt in trading. It closed down 8.3 per cent, while chipmakers Samsung Electronics and SK Hynix dropped 10.2 per cent and 7.7 per cent respectively. The two companies account for about 40 per cent of the index.
In Tokyo, the tech-heavy Nikkei 225 closed 3.9 per cent lower, while the broader Topix fell 2.5 per cent. Taiwan’s Taiex, where chipmaker TSMC dominates, fell as much as 6 per cent before closing down 3.5 per cent.
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In Europe, the broad Stoxx Europe 600 was 0.3 per cent lower. Chipmaker ASML, Europe’s largest company by market value, initially fell more than 3 per cent before reversing course to trade flat on the day. The Iseq was down 0.45 per cent.
Monday’s declines in Europe and Asia follow a 4.2 per cent drop in the Nasdaq Composite on Friday, the biggest since April last year, after a strong US jobs report prompted traders to raise bets on higher US interest rates.
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“You have a mix of things happening at the same time,” said Emmanuel Cau, equity analyst at Barclays. “There’s concern about central banks, the market having all this supply in the hot part of the market, and in the background, the war in Iran is just not going away.”
The sell-off comes at a pivotal moment for Wall Street, with SpaceX set to go public on Friday in a deal that could raise $86 billion and give Elon Musk’s AI-to-rockets group a $1.78 trillion valuation. Futures tracking the Nasdaq 100 and S&P 500 were up 0.7 per cent and 0.3 per cent respectively on Monday.
Facebook owner Meta is also considering a big share raising, while Google announced a landmark $85 billion offering, heightening nerves in the market that a flood of new equity issuance could spark volatility.
Mohit Kumar, chief European economist at Jefferies, said that “higher rates and concerns over mega IPOs” were weighing on the market but that “the sharp reaction was mostly down to positioning”.
Analysts said investors had been heavily crowded in bets on global semiconductor stocks, and Cboe data showed that positioning in the options market was also “extremely bullish”, making the market vulnerable to big drops lower on bad news.
The blue-chip S&P 500 index declined 2.6 per cent on Friday, snapping a nine-week winning streak and one of the strongest two-month US stock market rallies in decades.
Barclays’ Cau said there is “some tech exhaustion” in the market. “What comes up a lot can come down a lot,” he said.
Ben Snider, Goldman Sachs’ chief US equity strategist, wrote on Friday that the “strength of the recent rally ... has generated a wave of client concern that stocks have moved ‘too far, too fast’ and are likely reflecting an unsustainable degree of investor euphoria”.
Other Asian markets with fewer listed chipmakers declined by a smaller margin. Hong Kong’s Hang Seng index and mainland China’s CSI 300 fell 1.2 per cent and 2.1 per cent respectively.
The Korea Exchange held an emergency meeting on Monday to discuss measures to ensure market stability amid rising volatility. The Kospi had more than doubled this year until the sell-off began late last week.
Foreign investors sold a net $10 billion worth of Korean shares last week alone, piling pressure on the won, which hit its lowest level against the dollar since March 2009.
South Korea’s government announced a series of measures to prop up the currency on Sunday, vowing to take action against speculative trading. – Copyright The Financial Times Limited 2026
