South Korea's KOSPI Plunges 7.28% as Hot US CPI and AI Debt Fears Hit Chipmakers

South Korea’s benchmark Korea Composite Stock Price Index (KOSPI) slid 7.28% to 5,571.27 by 10:13 a.m. Seoul time on Thursday after opening 5.59% lower at 5,673.01. The drop extended a six-session losing streak, leaving the index roughly 40% below its June 19 peak, though TradingView data shows it remains up 31.87% for 2026. According to Korea JoongAng Daily, the initial plunge triggered a five-minute "sidecar" program trading pause at 9:08 a.m. after KOSPI 200 futures fell 5% for one minute. Foreign investors offloaded a net 285.6 billion won early in the session as SK Hynix fell 7.61% and Samsung Electronics dropped 6.03%, compounding existing pressure from a memory chip advance by China's ChangXin Memory Technologies. The sell-off followed a US Labor Department report showing September Consumer Price Index (CPI) inflation reached 3.7%, above the 3.6% economist forecast, while core inflation beat estimates at 2.6%. The inflation data revived market fears that the Federal Reserve could hike interest rates again at its October 27–28 meeting after raising rates in September. Higher borrowing costs directly pressure companies financing AI data centers with debt, a concern that already weighed on US equities Wednesday as NVIDIA $NVDA fell more than 3% and the Nasdaq Composite dropped 1.88%.