South Korea Leads a Global Equity Selloff as Strong US Jobs Data Revives Fed Hike Fears

South Korea's stock market fell more sharply than other major markets on Monday. The KOSPI index dropped about 8.3 percent and triggered its circuit breakers, the automatic halts that pause trading, for the first time in three months, according to the Financial Times and to RBC, which reported the trading halt and the rate fears behind it. Samsung Electronics dropped about 10 percent and SK Hynix fell close to 8 percent. Together the two chipmakers account for roughly half of the index's value.

The cause was United States economic data. The United States added 172,000 jobs in May, far more than the 80,000 economists had expected. That figure pushed traders to raise the probability of a Federal Reserve rate increase later this year to around 70 percent, as measured in futures markets. On Friday the Nasdaq Composite had already fallen 4.18 percent, its steepest single-day decline since April 2025, and the Dow Jones Industrial Average lost 695 points to close at 50,866.

The Korean won fell to 1,615 per dollar on Friday and then recovered more than 1 percent to about 1,534 after South Korean authorities held an emergency meeting and warned against speculative selling.

The episode shows how much of the increase in artificial-intelligence and semiconductor share prices depended on the expectation of lower interest rates. When the labor market stays strong and interest rates are likely to remain high or rise, investors reassess the high valuations that low rates had supported. Because two chipmakers make up about half of the Korean index, the adjustment in their shares moves the whole market more sharply.