Global financial markets came under synchronized pressure on June 23, with South Korea's KOSPI index plunging 10% intraday, triggering its second circuit breaker this month and marking the most visible flashpoint of the sell-off. Leading chipmakers Samsung and SK Hynix each slumped more than 12% in that session.
SK Hynix Slows Expansion as Chip Demand Outlook Worsens
According to local media reports, SK Hynix is scaling back capacity expansion at its new chip line and shifting focus to lower-cost, standard chips to offset revenue shortfalls. The move signals a downward revision of demand expectations for the company, a key player in AI-related memory markets. Korean investors had built large leveraged positions in chip stocks in recent months, and regulators had warned of overheating. The sharp decline triggered forced liquidations, amplifying the rout.
Fed Rate Hike Expectations Damp Risk Appetite
Of the U.S. Federal Reserve's 19 policymakers, nine now anticipate at least one rate increase this year. Market pricing assigns a 70% probability of a rate hike by September. A tighter rate outlook raises the cost of holding riskier assets, including equities and cryptocurrencies.
Quarter-End Rebalancing and Yen Carry Trade Unwind Hit Markets
JPMorgan cautioned that forced equity sales from global portfolio rebalancing at quarter-end could reach as much as $165 billion. Large pension and sovereign wealth funds are trimming stock and bond exposures to return to target allocations, with the window likely open until June 30. Additionally, wild swings in the dollar-yen pair the previous day led to speculation that Japan intervened to defend the yen. Such moves may disrupt "yen carry trades" — where investors borrow cheaply in yen to invest in global equities and risk assets. Unwinding these trades can trigger simultaneous selling across multiple markets.
Analysts say the carry trade unwind explains why diverse assets like gold, silver, and stocks fell in parallel, though not directly correlated. On Wall Street, the Nasdaq closed the previous session down 2.33%, while futures pointed to a further loss of about 2.5% at the next open.
US Tech Giants Deepen Losses: Alphabet, SpaceX, Amazon Hit
Among specific companies, Alphabet lost 5% after reports of talent departures in its AI teams. SpaceX slid 16% over three sessions, dropping from $176 to $154. Other major players including Amazon, Meta, and Microsoft also saw losses as part of the broader sell-off.