Expectations of interest rate hikes combined with inflation concerns led to a decline in global stock markets, a 5% plunge in South Korean stocks, a surge in bond yields, and silver falling below $80.

Expectations of interest rate hikes combined with inflation concerns led to a decline in global stock markets, a 5% plunge in South Korean stocks, a surge in bond yields, and silver falling below $80.

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The South Korean stock market rapidly reversed after briefly touching a historic milestone, as foreign investors heavily sold off technology stocks, putting significant selling pressure on the KOSPI. The global stock market generally weakened. Oil prices soared, intensifying concerns about a resurgence in inflation, with oil extending its rally and gold falling below $4,600 per ounce.

On Friday, the KOSPI briefly touched 8,000 points in early trading, then plummeted, with losses nearing 5% at one point. Foreign investors continued net selling, hitting the technology sector first, with net outflows exceeding $2.5 billion. Samsung Electronics and SK Hynix each fell more than 5% on Friday, dragging down the main index. Global markets were also broadly under pressure; Japan’s Nikkei 225 Index fell 1.3%, Euro Stoxx 50 Index futures extended losses to 1.3%, and U.S. stock index futures also widened their declines, with Nasdaq futures down 0.9%.

Spot gold dropped further during the day, falling by as much as 1.10%, losing the $4,600 per ounce mark. Spot silver fell below $80 per ounce, down 4.19% intraday. WTI crude oil futures rose 1.4% to $102.58 per barrel, while Brent crude rose 1.3% to $107.08 per barrel, with ongoing tensions in the Strait of Hormuz continuing to support oil prices.

Inflation concerns weighed on bonds. The U.S. 2-year Treasury yield rose 4 basis points to 4.06%, while the 10-year Treasury yield climbed to 4.53%. Japanese government bond yields rose, with the 20-year yield up 6.5 basis points to 3.61%, the highest since 1996. Pepperstone Group research strategist Wu Diling stated: "The market has completely priced out a Fed rate cut this year, and has started to think a rate hike before year-end is more likely. With oil prices remaining high, the question of how much longer stocks can hold up under these circumstances is becoming increasingly urgent."

KOSPI briefly touched 8,000 points in early trading, then plummeted, with losses nearing 5%. Samsung Electronics and SK Hynix each fell more than 5%.Euro Stoxx 50 Index futures extended losses to 1.3%, DAX futures fell 1.4%, and FTSE 100 futures fell 0.7%.U.S. stock index futures extended losses, with S&P 500 futures down 0.5% and Nasdaq futures down 0.9%.The U.S. 10-year Treasury yield rose to 4.530%, the highest since May 2025.Japanese government bond yields rose, with the 20-year yield up 6.5 basis points to 3.61%, the highest since 1996.The U.S. Dollar Index rose 0.2%.Spot gold dropped further during the day, falling by as much as 1.10%, losing the $4,600 per ounce mark.Spot silver fell below $80 per ounce, down 4.19% intraday.WTI crude oil futures rose 1.4% to $102.58 a barrel, Brent crude rose 1.3% to $107.08 a barrel.Bitcoin edged down 0.1% but regained the $80,000 level, at $81,311.29.

Foreign Investors Cash Out, KOSPI Swings at High Levels

KOSPI has risen about 80% year-to-date. The strong upward momentum has attracted large inflows of global capital, while also raising concerns over high valuations and increased volatility.

Christian Heck, portfolio manager at First Eagle Investments, said that although the KOSPI’s valuation is still reasonable compared with U.S. indexes, "relative to Korea's own history, valuations are already expensive." He further pointed out that KOSPI "has largely become a bet on two large memory chipmakers," which combined account for about half of the index's weight.

Eugene Investment & Securities strategist Huh Jae-Hwan said, "There are concerns about the rally being too fast—KOSPI rose about 60% in just a month and a half, so some degree of pullback is normal."

Daily swings of 5% or more have become increasingly frequent in the Korean stock market. As retail investors increase leveraged buying and ETF inflows rise, intraday volatility continues to increase.

Oil Prices Continue to Rise at High Levels, Gold Under Pressure

Geopolitical tensions continue to support oil markets. The Strait of Hormuz remains highly restricted, and there has been no substantial progress on a ceasefire agreement. During Asian trading on Friday, Brent crude oil futures rose 1.3% to $107.08 a barrel, and WTI crude rose 1.4% to $102.58 a barrel.

For safe-haven assets, spot gold fell under pressure, extending losses within the day to as much as 1.10%, breaking below the $4,600 per ounce mark. Bitcoin edged down 0.1% but regained the $80,000 level, at $81,311.29.

The U.S. 10-year Treasury yield rose to 4.530%, the highest level since May 2025.

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