▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and delivers six tailored news items for each reader type.
[Key Issue Briefing]
■ KOSPI Snaps Seven-Session Losing Streak: The KOSPI rose 113.83 points, or 2.05%, ending a seven-session losing streak, while the KOSDAQ jumped 4.46%, triggering a buy-side sidecar. An official in the securities industry said, "The recent plunge in domestic equities was excessive relative to earnings forecasts at major companies," suggesting the market may have passed its bottom and could stage a W-shaped rebound.
■ Rates, AI Overinvestment and Chinese Competition Wipe Out 1,340 Trillion Won in Global Market Value Over Four Sessions: Concerns over further rate increases, debt burdens tied to AI data centers and a technology disclosure by China's ChangXin Memory Technologies (CXMT) surfaced at the same time, erasing $1 trillion, or about 1,340 trillion won, from the market value of global AI and semiconductor stocks over four trading sessions. Gil Luria, an analyst at D.A. Davidson, said, "If there is an impact, it will show up at SK hynix (000660) and Samsung Electronics (005930)," indicating the damage would be concentrated at Korean companies.
■ Fed Chair Warsh Signals Rate Hold While Voicing Confidence in AI's Long-Term Wealth Creation: Federal Reserve Chair Kevin Warsh described AI as "the most consequential change of my lifetime" and expressed optimism about its long-term economic effects, while stopping short of signaling any rush toward further tightening. The probability of an October rate increase, based on CME FedWatch, fell from about 30% to the low teens.
[News of Interest to Stock Investors]
1. KOSPI Rebounds After Eight Sessions; KOSDAQ Briefly Triggers Buy-Side Sidecar [Market Signal]
Key points: The KOSPI rose 2.05%, snapping a seven-session losing streak, while the KOSDAQ surged 4.46%, triggering a buy-side sidecar at 12:55 p.m. Most top-capitalization stocks advanced, with the biggest gains in sectors relatively less tied to the AI industry, including Hyundai Motor (5.58%), Samsung C&T (7.10%) and Hanwha Aerospace (7.77%). Analysts in the securities industry said the prior session's plunges at Samsung Electronics (-9.48%) and SK hynix (-11.06%) were excessive relative to earnings forecasts. TrendForce projected double-digit percentage growth in DRAM prices in the fourth quarter, lending weight to the view that the selloff had overshot fundamentals.
2. U.S. AI, Chip Stocks Also Shed 1,340 Trillion Won on Rates, AI Spending and China [Market Mover]
Key points: The combined market value of the world's 20 largest AI and semiconductor stocks fell by $1 trillion, or about 1,340 trillion won, over four trading sessions, according to CNBC, with the steepest declines at Nvidia (-5.3%), followed by Samsung Electronics and SK hynix. Alongside concerns that higher rates will raise the cost of financing data centers, Gartner projected that cumulative AI infrastructure investment of $7 trillion from 2026 to 2030 would generate only $3.6 trillion in data center revenue. A disclosure of new structural technology by China's CXMT prompted warnings of a memory supply glut by 2029, and Elon Musk responded that China will produce an enormous amount of RAM in 2028. Luria of D.A. Davidson said the shock from China would be concentrated at SK hynix and Samsung Electronics rather than Micron.
3. Cash Every Month: Covered-Call ETFs Emerge as a Shelter in Volatile Markets [S Money+]
Key points: Total net assets of covered-call exchange-traded funds listed in Korea nearly doubled in 10 months, rising to 27.74 trillion won from 15.11 trillion won at the start of the year. Inflows over the past three months concentrated in products such as KODEX 200 Covered Call Active (891.2 billion won) and TIGER Dividend Covered Call Active (851.2 billion won), while the range of options has widened to include products based on U.S. technology and dividend stocks. Lee Jung-hwan, head of the strategic ETF management division at Mirae Asset Global Investments, said, "Selection criteria have shifted from distribution yields toward total returns, and the market has matured a step further." Jung Jae-wook, head of the third ETF management team at Samsung Asset Management, said, "When share prices plunge, option premiums alone cannot cushion losses," stressing that the choice of underlying assets is the key variable determining performance in volatile markets.
4. Fed Chair Warsh Says AI Will Create Wealth Despite a Rough Road; Markets Take Relief
Key points: Speaking at the annual meetings of the International Monetary Fund and the World Bank in Bangkok, Federal Reserve Chair Warsh called AI the most consequential change of his lifetime and voiced confidence in its long-term wealth creation and productivity gains. As he stopped short of signaling a rush to tighten further, the probability of an October rate increase based on CME FedWatch slipped from about 30% to the low teens during the conversation. Separately, a "two-plus-two" meeting between Deputy Prime Minister Lee Hyoung-il and Bank of Korea Governor Shin Hyun-song and Warsh and U.S. Deputy Treasury Secretary Brooke was held for the first time. Lee said, "It is the first time the finance ministries and central banks of the two countries have come together in this format," underscoring the significance of the meeting.
