Seoul Stocks Slide as AI Funding Fears and Rising Oil Prices Hit Chipmakers

KOSPI rebounds after falling more than 4%

South Korean stocks fell sharply on Friday, October 23, 2026, as a selloff in American artificial intelligence companies spread to Asian chipmakers and rising oil prices added pressure. The KOSPI benchmark opened down 2.36% at 5,403.17, later sank to 5,305.98, a loss of 4.11%, then recovered some ground as buyers returned.

By 11:53 a.m. in Seoul, equivalent to 10:53 a.m. in Taipei, the index stood at 5,428.94, down 1.89%. That put it about 2.32% above its morning low, although it remained below the previous session's close. SK hynix, which had fallen at the start of trading, turned higher during the rebound.

The immediate trigger came from Wall Street, where the Nasdaq Composite lost 2.6% and the Philadelphia Semiconductor Index dropped 6.72%. Investors were increasingly focused on how companies would pay for expensive AI infrastructure, even when their existing businesses were producing strong sales.

Oil delivered a second shock. Brent crude rose 4% to $113.17 a barrel amid renewed concern about conflict in the Middle East and possible interruptions to supplies. South Korea depends heavily on imported energy, leaving businesses exposed when fuel becomes more expensive.

Friday's trading brought together two pressures that had already shaken Korean markets this year: dependence on semiconductor investment and sensitivity to energy costs. The morning recovery reduced the losses, while the size of the earlier drop showed how quickly uncertainty about American technology spending could reach Seoul.

How the morning selloff unfolded

The KOSPI fell further immediately after opening, then moved unevenly as investors responded to falling technology shares and company news. The smaller KOSDAQ market also opened lower, losing 15.78 points, or 2.07%, to 748.32.

The trading sequence shows both the initial pressure and the later recovery. All times below are Seoul time:

• October 22, New York close: The Nasdaq fell 2.6%, the S&P 500 lost 1.21%, and the Dow Jones Industrial Average edged up 0.02%.
• October 23, Seoul opening: The KOSPI fell 130.60 points, or 2.36%, to 5,403.17.
• 9:05 a.m.: The KOSPI traded at 5,353.17, down about 3.3%.
• 9:15 a.m.: The index stood at 5,377.17, down 156.60 points, or 2.83%.
• Later in the morning: The index reached 5,305.98, a decline of 4.11%.
• 11:20 a.m.: The KOSPI was at 5,398.48, down 2.44%.
• 11:53 a.m.: The index recovered to 5,428.94, down 1.89%, with SK hynix turning higher.

The figures describe trading before noon. The closing level would determine how much of the morning recovery survived the rest of the session.

Foreign selling meets domestic buying

Foreign investors were net sellers of 217.7 billion won in shares during early trading. Institutions bought a net 209.1 billion won, while individual investors bought 20.9 billion won.

A net sale means an investor group sold more shares than it bought. Those early figures show overseas investors reducing their holdings while Korean institutions and individuals took the other side of much of the selling.

Samsung Electronics fell 3.26% early in the session and remained down 3.03% at 11:20 a.m. SK hynix initially lost 2.21%, but its decline had narrowed to 0.25% by 11:20 a.m., before it moved into positive territory later.

Losses extended beyond the two biggest chipmakers. Battery producer LG Energy Solution dropped 2.56% early on, while Samsung Electro-Mechanics, which makes electronic components, fell 6.64%. The breadth of those declines showed investors cutting exposure across several large industrial and technology businesses.

Why strong AI sales no longer reassure investors

Meta provided the clearest example of the change in investor attention. Its shares fell about 7% despite earnings exceeding expectations, as the cost of building AI infrastructure drew more scrutiny than the strength of its advertising business.

The company's third quarter operating cash flow was $32.786 billion, while capital expenditure reached $34.91 billion. Operating cash flow is the cash generated by everyday business. Capital expenditure pays for assets such as servers, chips and data centres that a company expects to use for years.

Meta's free cash flow, the money left after those investments, was negative $2.12 billion, compared with positive $10.63 billion a year earlier. That represents a deterioration of about $12.75 billion. Its infrastructure spending had grown large enough to exceed the cash coming in from operations during the quarter.

Meta also raised the lower end of its annual capital spending forecast, changing the range from $130 billion to $145 billion to $135 billion to $145 billion. The upper limit stayed unchanged, but the new range committed the company to at least $5 billion more spending than the previous minimum.

Plans for a new class of shares without voting rights added another financing issue. Meta intended to use the proposed Class C shares to help fund AI investment and acquisitions. For investors, the central calculation was becoming how much cash the expansion would consume before it produced sufficient returns.

The funding squeeze reaches cloud operators

CoreWeave and Nebius, companies that provide computing capacity for AI developers, fell about 10% and 7%, respectively. Their businesses require large spending before customers can use the equipment: they obtain powerful processors, secure data centre space and then rent access to that computing capacity.

Borrowing costs matter because debt helps pay for that initial investment. CoreWeave's unsecured bond yields exceeded 15%. Unsecured bonds have no specific assets pledged as collateral, and a high yield makes new borrowing expensive while showing that investors demand substantial compensation for lending.

CoreWeave's credit default swap premiums also remained elevated. These contracts function like insurance against a borrower failing to repay its debt. Higher premiums increase the cost of protection against that risk.

Nebius announced a $3.5 billion credit facility from Citigroup, giving it access to additional borrowing, yet its shares still declined. Nvidia chief executive Jensen Huang said demand for specialist AI cloud providers such as CoreWeave was strong, while a lack of capital was restricting their growth.

That combination helps explain why doubts spread across several kinds of company at once. A cloud operator needs funding to buy processors. A chipmaker needs customers able to pay for those processors. Equipment suppliers depend on chipmakers continuing to expand production. Pressure on financing can therefore travel through the entire chain.

Chip losses spread across the Pacific

Nvidia fell 4.4%, Micron Technology lost 6.26%, and Intel dropped 8.04% in the American session. AMD declined more than 8%, while semiconductor equipment maker Lam Research fell about 12% after its earnings announcement.

The Philadelphia Semiconductor Index's 6.72% fall showed that selling extended well beyond a single company. Shares in Taiwan Semiconductor Manufacturing Co. traded in the United States lost $19.54, or 4.52%, to close at $412.35.

Japan also faced heavy selling on Friday. The Nikkei opened at 62,667, fell as low as 61,462, a decline of 2.29%, and recovered to 61,825 in the morning session, still down 1.72%. Korea's sharper intraday fall put its market under particular pressure during the regional retreat.

Apple moved differently during the broader reassessment of AI spending. Its shares had risen 27% during the year and gained about 2% in the previous week, when the Philadelphia Semiconductor Index fell more than 11%. Apple's comparatively restrained infrastructure spending and steady cash generation attracted investors seeking less exposure to the immediate cost of the AI buildout.

The contrast was between companies spending heavily now to build future computing capacity and a business carrying a smaller direct infrastructure burden. Investors were paying closer attention to the timing of cash spending, alongside expectations for future growth.

Solidigm decision helps SK hynix recover

SK hynix had company news that partly offset the global selling pressure. It said it was withdrawing plans to list its American subsidiary Solidigm on Nasdaq, citing capital market conditions and share price trends.

The company said it needed to reassess whether an initial public offering was the best choice for SK hynix and its existing shareholders. An initial public offering, or IPO, gives outside investors the opportunity to buy shares in a business when it first lists on an exchange.

Solidigm sits within several layers of ownership: SK Square is the parent of SK hynix, which owns Solidigm. A separate Solidigm listing had raised concern about the holding company discount, where investors value a parent company's shares below the estimated value of the assets it owns.

With another business in the same ownership chain listed separately, investors would have more choices about where to buy exposure. That had fed concerns about how much value would remain attached to shares in the parent companies.

SK hynix pared its early losses after the decision, while SK Square was down 0.4% at 11:20 a.m. No new timetable for a Solidigm listing was announced.

Oil adds pressure while bonds attract buyers

Brent's rise to $113.17 a barrel was accompanied by a 2.39% increase in West Texas Intermediate crude to $99.47. Supply concerns intensified after Yemen's Iran aligned Houthi rebels said they had again attacked key facilities in Saudi Arabia.

For South Korea, higher oil prices can increase the cost of transport, manufacturing and imported fuel. Businesses may face smaller profit margins if they absorb those costs, while households can face higher bills if companies pass them on.

Investors also bought American government bonds. The yield on the Treasury note maturing in 10 years fell by more than 0.17 percentage points to 4.972%, its lowest level in about a month. The yield on the note maturing in two years fell by more than 0.16 percentage points to 4.659%. Bond prices rise when yields fall.

The Korean won strengthened during the morning despite the decline in stocks. The dollar bought 1,325.8 won at 9:15 a.m. and 1,324 won at 11:20 a.m. A lower won price for the dollar means the Korean currency is stronger, which can soften some of the local cost of purchases priced in dollars.

A familiar pressure returns to Seoul

South Korea experienced a much larger shock during the March market crash, when war involving the United States, Israel and Iran helped drive the KOSPI down 12.06% on March 4. It closed that day at 5,093.54 after losing almost 19% across two sessions.

Friday's morning low of 5,305.98 remained above that March closing level. The recurring vulnerability was the combination of expensive imported energy and heavy exposure to technology shares, even though the immediate focus this time included the financing of AI expansion.

Domestic buying and the Solidigm decision helped the market recover during the morning. The wider pressure remained concrete: American technology companies faced questions about cash consumption, specialist cloud operators faced expensive borrowing, and Korean manufacturers faced higher oil prices.

Key Points

• The KOSPI opened down 2.36%, fell as much as 4.11% and recovered to a loss of 1.89% by 11:53 a.m. in Seoul.
• Foreign investors were early net sellers of 217.7 billion won, while institutions and individuals bought shares.
• American chip stocks fell sharply as investors focused on AI spending and access to financing.
• Meta recorded negative free cash flow of $2.12 billion despite strong earnings.
• SK hynix recovered after withdrawing Solidigm's planned Nasdaq listing.
• Brent crude rose 4% to $113.17 a barrel, adding energy cost concerns for South Korea.