Interest Rates, Exchange Rates and AI Fears Hit at Once... Short-Term Correction or Further Decline? [Stock Market 'Black Monday']

The KOSPI faced a "Black Monday" as concerns over interest rates, exchange rates and artificial intelligence (AI) all erupted at once. In the securities industry, the dominant view is that the plunge reflects a temporary correction driven by a reassessment of rates and exchange rates. Still, there is also strong caution that the sustainability of the AI investment cycle needs to be examined.
According to the investment banking industry on the 8th, market participants cited worries about rate hikes, controversy over reduced memory capacity in NVIDIA's next-generation "Rubin" platform, and a sharp rise in the won-dollar exchange rate as key reasons for the selloff. The debate over the AI investment cycle is also intensifying as Broadcom's earnings and the funding burden on Big Tech add to the pressure.
The U.S. employment data was seen as the direct trigger that increased pressure on the market. Nonfarm payrolls in the United States rose by 172,000 in May, far above the market forecast of around 85,000, prompting expectations for rate cuts to recede and reviving talk of possible rate hikes. However, some analysts say the strong jobs report was heavily influenced by World Cup-related service hiring and expanded local government recruitment, so it may be excessive to read too much into rate-hike fears.
Kim Byung-yeon, a researcher at NH Investment & Securities, said, "Employment in leisure and hospitality rose by 70,000, while local government hiring increased by 55,000, accounting for 73% of total new jobs," adding, "Because the gains were concentrated in World Cup-related service demand and local government hiring, the Fed is likely to choose a dovish hold that lowers the odds of a rate hike."
In the semiconductor sector, controversy surrounding NVIDIA's next-generation platform also shook investor sentiment. Market speculation spread that the amount of low-power DRAM (LPDDR) used in Rubin could be smaller than previously expected. Investors appear to have interpreted this as a sign of slowing memory demand and moved to take profits in major memory makers such as Samsung Electronics Co., Ltd. and SK hynix.
Experts, however, said the possibility of reduced LPDDR usage may reflect design adjustments made to address supply shortages rather than weaker demand.
Kim Doo-eon, a researcher at Hana Securities, said, "From this year through next year, NVIDIA will be the largest buyer of LPDDR," and added, "If the LPDDR capacity is reduced, it is reasonable to see that not as a sign of weakening AI demand, but as a response to supply constraints aimed at making Rubin shipments possible."
Exchange-rate volatility is also weighing on the market. As the won-dollar exchange rate recently surged to the 1,550-1,560 won range, concerns over foreign investors' flows have grown. From the perspective of foreign investors, exchange losses may be more prominent than stock-price appeal. On the other hand, some say a weaker won can benefit exporters' earnings. Kim Jun-young, a researcher at iM Securities, said, "Rather, the high-exchange-rate environment is serving as a support that helps maintain the price competitiveness of export industries other than semiconductors," adding, "While a strong won-dollar rate may weigh on overall market valuations, it is actually contributing positively to the earnings of large export companies."
Some observers argue that this correction cannot be dismissed as simple profit-taking. Some brokerages are even projecting that KOSPI support could fall to the 7,000 level during the short-term correction phase. They point out that expectations for expanded AI investment have somewhat weakened after Broadcom's earnings release, while the possibility of large-scale equity offerings by Alphabet Inc. and Meta Platforms has emerged as a new variable, raising funding concerns for Big Tech.
Cho Jun-ki, a researcher at SK Securities, said, "If Big Tech companies carry out a series of equity offerings, it is highly likely to hurt short-term investor sentiment," adding, "The fact that they are resorting even to equity issuance, which is the last resort in a company's capital-raising sequence, is a clear sign that the burden of financing costs is being pushed all the way to the bottom."
koreanbae@fnnews.com Bae Han-geul Reporter