Asian markets took a beating on Tuesday, with South Korea's KOSPI plunging 8.10% to 6,208.34 — its worst session in years. Chip stocks led the rout: SK Hynix sank 11.01%, Samsung Electronics dropped 9.45%, and Japan's Kioxia cratered 16.5%. The sell-off spilled into crypto, with Bitcoin falling 2.9% to $63,199 over the past 24 hours.
Sidecars triggered as selling intensifies
The Korea Exchange triggered a sell-side sidecar shortly after the open — the 22nd such halt this year. A similar mechanism tripped on the Kosdaq soon after. In Japan, the Nikkei 225 lost 3.90% and the Topix fell 2.49%. Tokyo Electron dropped over 9%, Advantest slid 8%, and SoftBank Group fell nearly 5%.
US-listed chip stocks weren't spared either. The VanEck Semiconductor ETF lost over 2% on Monday. AMD fell 5%, Teradyne dropped 4%.
AI spending skepticism weighs on sentiment
Investors remain skeptical about tech giants' heavy AI spending. That skepticism hit home as SK Hynix and Samsung announced $950 billion AI deals — likely a typo for $950 million — but the market wasn't impressed. The timing isn't great: SK Hynix reports quarterly earnings on Wednesday, July 29, alongside Microsoft, Meta, and a Federal Reserve rate decision. Apple and Amazon report on Thursday.
US futures pointed to further weakness Tuesday morning. S&P 500 futures were down 0.1%, Nasdaq 100 futures down 0.42%, and Dow futures down 0.04%.
All eyes are on Wednesday's earnings from SK Hynix, Microsoft, and Meta, plus the Fed's rate decision. The market wants to see if AI spending is actually paying off — or if the hype has run ahead of reality. Apple and Amazon report Thursday. For crypto, Bitcoin's slide below $64K adds to the risk-off mood. The next few days will tell whether this is a one-day panic or the start of a deeper correction.
