The Korean Stock Market Crashes Overnight. Will it Be Another Brutal Nasdaq Sell-Off on Tuesday?

South Korea's KOSPI conscionable handed planetary spot investors a jolt. The scale closed down 10.84% overnight, with representation names starring the wreck: Samsung fell 13.39% and SK Hynix fell 14.65%. The monolithic driblet successful the Kospi is reverberating crossed the globe. Investors are fleeing to information with DOW Futures up .21%. However, arsenic of 6:30 a.m. ET, Nasdaq futures are down 0.84%, portion spot stocks are dropping acold harder successful premarket.

Micron Leads Pre-Market Declines

Micron Technology (NASDAQ:MU) is down 5.4%, and the VanEck Semiconductor ETF (NASDAQ:SMH) is down 2.9%. This lands aft yesterday was different successful a agelong bid of sell-offs crossed momentum and chips stocks. The iShares MSCI USA Momentum Factor ETF (CBOE: MTUM), which tracks momentum stocks, was down 1.33% yesterday and is down 1.93% pre-market. The ETF is down astir 14% from caller highs successful pre-market trading.

Micron shares are already down 20.49% implicit the past month, yet fundamentals stay a antithetic story: fiscal Q3 gross of $41.46 cardinal and Q4 guidance of $50.0 cardinal ± $1.0 billion. SMH holds MU astatine 9.39%, truthful representation unit hits the ETF directly. The VIX astatine 18.58 signals nary wide panic yet, suggesting this is sector-specific, for now.

KOSPI Now Down 34% From Recent Highs

The KOSPI closed astatine 9,114.55 connected June 22nd. At today's close, it's present astatine 6,023.66. That's a 34% driblet successful a small much than a month. Despite this monolithic drop, the scale is up 43% year-to-date. The Nasdaq opened successful affirmative territory yesterday, but dropped aft reports NVIDIA (Nasdaq: NVDA) was preparing up to $750 cardinal successful caller financing and partnerships with OpenAI and SK Hynix.

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What to Watch Today

The KOSPI unwind has intelligibly dispersed crossed exertion and momentum stocks. After a furious rally successful April and May, valuations became stretched connected galore fashionable names. Korean investors became profoundly concentrated successful leveraged products that marque the unwind adjacent much painful. Watch to spot whether ETFs similar SMH and MTUM proceed to severely underperform the index. If they're some heavy reddish and the Dow is successful affirmative territory erstwhile markets open, we're seeing the continuation of a wide rally retired of hazard assets.

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