Chip giants slump more than 5%! South Korea's Kospi index plunged 4.8% from its historical high triggering a circuit breaker, Micron's financial report may become the "touchstone" of the stock market.

Notice that, due to investors' concerns about overpricing, selling off of chip giants' stocks, the South Korean stock market has experienced a significant drop from its historical high. The Korean Composite Stock Price Index (Kospi) fell by as much as 4.8%, with both Samsung Electronics and SK Hynix dropping by over 5%. Due to the sharp decline in futures prices, the Korean Exchange briefly suspended programmatic sell-offs and once again activated the market protection mechanism which has become more frequent this month. Foreign investors sold more than 2 trillion Korean won (approximately $1.3 billion) worth of Kospi stocks in the early trading session, while retail investors increased their holdings. Before this latest downturn, the benchmark index had regained its upward momentum this month and repeatedly hit new historical highs, surpassing the 9,000-point milestone for the first time as investors brushed aside concerns related to the Iran conflict. Lee Jae Mahn, a strategist at Seoul Hanwha Securities, stated that in the past few days, several signs of overheating have appeared in the stock market, including SK Hynix's valuation becoming even more expensive than Samsung's. Lee Jae Mahn stated, "For the Kospi index to rise further in the future, Samsung's stock price increase should surpass SK Hynix's," as Samsung's second-quarter profit is expected to exceed that of SK Hynix. In Monday's US stock trading, sentiment towards the tech stocks that had been performing strongly became uncertain, with the decline in SpaceX's stock price, and the market focus shifting to the quarterly earnings report of Micron Technology, a storage chip manufacturer, later this week. Dilin Wu, a strategist at Pepperstone Group, said, "Micron's earnings report this week is the real test," "Strong data will directly guide Samsung and SK Hynix - this number will tell you whether the hardware side of this trade still has momentum." The recent sharp drop in the Kospi index highlights the increasing volatility of the best-performing major stock indexes globally this year. Leveraged exchange-traded funds (ETFs) linked to these chip manufacturers have amplified price fluctuations, and the highest financial regulatory authority in South Korea had previously expressed regret over approving these high-risk products. Lee Chan-Jin, the chief of the Financial Supervisory Service of South Korea, stated during a press conference on Monday that officials are assessing stabilization measures to limit the negative impacts of the severe fluctuations in ETFs tracking Samsung Electronics and SK Hynix. Before the drop on Tuesday, SK Hynix's stock price had risen for 8 consecutive trading days by more than 2%. Ha SeokKeun, the Chief Investment Officer at Seoul Eugene Asset Management, stated, "The sell-off seems to be mainly driven by profit taking after a recent sharp rebound, as the market has become increasingly overbought," "Retail high leverage and financing balances may have amplified the decline, making the market more sensitive to negative catalysts."