The screens in Seoul went dark.
Trading on the KOSPI halted for twenty minutes Tuesday after the index plunged roughly 10% in a single session, its steepest drop in months. Foreign investors dumped nearly $4 billion in Korean equities. Samsung Electronics fell about 12%. SK Hynix dropped the same. When the circuit breaker lifted, the selling resumed.
The trigger was American.
Monday's Nasdaq selloff, driven by the AI talent exodus at Google and the broader rotation out of mega-cap tech, rippled across the Pacific overnight. But Tuesday's damage in the U.S. was worse. The Nasdaq Composite fell 2.2% to close near 25,590. The S&P 500 dropped 1.4% to around 7,365. The S&P 500 technology sector alone lost 4.1% on the session. The Philadelphia Semiconductor Index tumbled nearly 8%, with Marvell Technology and Micron both dropping double digits.
The Dow slipped just 0.09% to around 51,668. That gap between the Dow and the Nasdaq tells you the selling is concentrated in the names that carried the first half of the year.
The Catalyst From Seoul Adds a Structural Wrinkle
Reports emerged Tuesday that SK Hynix is slowing its HBM4 expansion and shifting capacity toward conventional DRAM. The economics explain the move. A global wafer shortage has pushed standard memory prices high enough that conventional DRAM margins now rival the margins on high-bandwidth memory chips. SK Hynix posted a 72% operating margin last quarter. Its entire 2026 HBM supply was already sold out earlier this year.
This is not a demand collapse. It is a margin reallocation. But the headline reads as "AI memory maker shifts away from AI chips," and in a market where semiconductors had become a consensus long, that was enough to trigger the largest single-day foreign sell in Korean equities in months.
Bank of America Raised the Stakes on Rates
A Bank of America research note out Tuesday projected three quarter-point hikes this year, with the first in September. Last week nine of 18 Fed officials projected at least one hike. BofA is now calling for three. The 10-year yield settled near 4.53%. The two-year pushed toward 4.25%.
For chip stocks, the rate path is not abstract. Semiconductor companies carry heavy capital expenditure loads and depend on forward earnings multiples that compress when rates rise. Three hikes reprices every growth multiple in the sector. And Micron, which reports after the close today, sits at the center of the question.
Wall Street expects Micron to deliver roughly $20 in earnings per share on revenue above $35 billion. The company guided fiscal Q3 to record revenue with gross margins around 81%. Those would be extraordinary numbers by any historical standard. The question tonight is not whether Micron beats. It is whether the guidance acknowledges a world where BofA expects rates to rise three more times and the world's largest HBM producer just told the market its expansion is shifting gears.
FedEx Beat the Quarter and Lost the Room
FedEx reported after the bell Tuesday. Adjusted earnings of $6.31 per share topped the $5.92 consensus. Revenue of $25 billion beat the $24 billion estimate. The company's first report since the Freight spinoff on June 1 showed the leaner structure is working. And the stock fell roughly 6% after hours because the calendar-year 2027 outlook disappointed. Stranded costs from the separation, a new pilot contract, and softer volume projections weighed on the forward view.
FedEx beat the backward-looking numbers and lost on the outlook. Micron walks into the same setup tonight.
Wednesday Follow-Up: Intel Held
A week after the Apple foundry deal, Intel has kept its gains through a stretch that crushed most of the semiconductor sector. While the Philly Semiconductor Index fell nearly 8% Tuesday, Intel's decline was modest by comparison. The foundry revenue story is decoupled from the AI-memory trade that drove the KOSPI rout, and the market is pricing that distinction clearly.
Gold pulled back sharply from Monday's levels as investors sold positions to cover losses in equities. Oil held near the low $70s as the Iran deal continues to ease supply. Nasdaq futures ticked higher overnight, up roughly half a percent, as bargain-hunting meets the weight of what Micron has to deliver after the close.
