Seoul’s AI-driven rally cools as stocks plunge and regulators tighten

South Korea’s stock market extended a two-day rout, wiping about $2.18 trillion in value as investors reassess AI-driven gains and pivot away from highly leveraged chipmakers; the KOSPI tumbled as much as 12.6% before closing down 6%, marking the steepest monthly drop on record and erasing roughly 40% from a peak reached a month earlier. Regulators and the finance ministry pledged tighter controls on single‑stock leveraged ETFs, potential higher trading costs, and investment limits aimed at stabilising markets amid panic, with emergency stabilization steps under consideration. Despite the sell-off, the KOSPI is up about 41.5% in USD terms year-to-date, making it one of the best performers globally this year.