From Seoul to Wall Street, the Korean Butterfly Effect Takes Grip

South Korea's KOSPI plunge detonated a selloff across global tech markets, with the Nasdaq 100 dropping 3.3% and semiconductor stocks shedding 8%. The contagion exposed dangerous levels of leverage and crowded positioning in AI-related equities, where traders had priced in years of flawless execution with minimal margin for error.

The cascade from Seoul to Wall Street revealed structural fragility beneath the AI trade. While underlying fundamentals in the semiconductor sector remain intact, valuations had stretched to assume uninterrupted growth trajectories. The 8% semiconductor drop signals investors are reassessing whether current prices reflect rational expectations or euphoric extrapolation.

Micron's upcoming earnings report now carries outsized weight in determining the path forward. The results will test whether the market correction represents a healthy pause or marks the beginning of a broader repricing across AI valuations. With positioning still concentrated and leverage elevated, any disappointment from Micron could accelerate the unwinding.