"Every Friday Feels Like a Crash, It's Scary"... Retail Investors Rattled as SK hynix Plunges Over 7%

[Financial News] Due to the hawkish stance of the Federal Reserve System (Fed) and a surge in Nvidia Corporation’s accounts receivable, the U.S. stock market tumbled, causing the KOSPI to plunge below the 3,900 mark early in the session.

According to the Korea Exchange, as of 9:20 a.m. on the 21st, the KOSPI had dropped 3.06% to 3,881.41 compared to the previous trading day. Shortly after the market opened, it fell further to 3,838.70, down 4.12%. Among the top market cap stocks, Samsung Electronics was trading at 96,600 won, down 3.98%, while SK hynix had plunged 7.79% to 526,500 won.
As the entire artificial intelligence (AI) value chain weakened in the U.S. market, domestic semiconductor-related stocks also suffered losses. On the 19th (local time), Nvidia Corporation reported earnings that showed growth in both revenue and earnings per share (EPS). However, the sharp increase in accounts receivable has fueled concerns about an AI bubble. Nvidia Corporation’s accounts receivable soared from $23.07 billion in the previous quarter to $33.39 billion (about 49.1 trillion won) this quarter.

In this context, officials from the Fed have warned about the possibility of overvalued assets, further unsettling the market. Lisa Cook, a Fed governor, expressed concern in a speech at Georgetown University McDonough School of Business in Washington, D.C., on the 20th, saying, "I get the impression that the likelihood of a decline in overvalued asset prices has increased." She added, "Private credit is estimated to have doubled over the past five years, and such rapid credit growth in a short period is a vulnerability that warrants attention."
Michael S. Barr, another Fed governor, also emphasized caution in monetary policy at an event in Washington, D.C. on the 21st. He stated, "Inflation remains around 3%, while our target is 2%. We must conduct monetary policy with great care and caution to achieve this goal."
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, echoed the hawkish tone. Delivering a speech in Indianapolis on the same day, Goolsbee remarked, "Inflation appears to have stalled and may move in the wrong direction," adding, "I still feel uneasy about further rate cuts." He will have voting rights at the Federal Open Market Committee (FOMC) meeting in December.
Beth Hammack, President of the Federal Reserve Bank of Cleveland, also warned that cutting rates to support the labor market could prolong high inflation and encourage excessive risk-taking in financial markets. She thus reinforced the case for caution regarding rate cuts.
hsg@fnnews.com Han Seung-gon Reporter