Seoul stocks sharply down on U.S. tech sell-off, Fed caution

Key facts

• Asian stock markets mostly declined on Thursday.
• Heavy selling in computer chip shares led the decline in Asian markets.
• South Korea's KOSPI index fell sharply.
• The Korea Exchange activated a sell-side sidecar due to the KOSPI's decline.
• Program trading was temporarily suspended following the activation of the sell-side sidecar.
• U.S. semiconductor stocks experienced a sell-off overnight.
• Major U.S. stock indexes closed mixed on Wednesday, July 1, 2026.
• The S&P 500 and Nasdaq fell due to tech stock weakness.
• The Dow Jones Industrial Average edged down slightly.
• Bond market gains provided some support in the U.S.
• A weaker manufacturing report influenced U.S. markets.
• Oil prices fell amid hopes of improved supply.

Asian stock markets largely declined on Thursday, with a significant sell-off in computer chip shares leading the downturn. South Korea's benchmark KOSPI index experienced a sharp fall, opening lower and paring earlier losses to trade down nearly 3 percent before extending its decline. The KOSPI eventually fell 5.34%, prompting the Korea Exchange (KRX) to activate a sell-side sidecar. This measure temporarily suspended program trading to mitigate further rapid price declines.

Overnight, U.S. semiconductor stocks experienced a sell-off, which directly pressured Korean chipmakers and contributed to the broader market weakness in Asia. In the United States, major stock indexes closed mixed on Wednesday, July 1, 2026. The S&P 500 and Nasdaq registered declines, primarily attributed to weakness in technology stocks. Conversely, the Dow Jones Industrial Average edged down slightly. Gains in the bond market provided some support for U.S. equities, particularly following the release of a weaker-than-expected manufacturing report.

In addition to the equity market movements, oil prices also saw a decline. This drop in oil prices occurred amidst hopes for improved supply conditions. Japan's Nikkei 225 also registered a significant drop, mirroring the trend seen in other Asian markets. U.S. futures remained relatively unchanged in early trading after the modest losses experienced on Wall Street the previous day.