In a tumultuous trading day for South Korea’s financial markets, the Kospi index plummeted by 7.9% on Thursday, primarily driven by significant losses from industry giants Samsung and SK Hynix. Together, these tech titans saw their market valuations decline by a staggering $290 billion. This marks the second time within a month that the Kospi has faced turmoil linked to concerns regarding artificial intelligence chip demand.
Meanwhile, the world of cryptocurrency displayed a contrasting trend as Bitcoin rebounded above $61,100, representing an increase of approximately 4% for the day, according to CoinDesk data. This shift in cryptocurrency fortunes comes amid broader discussions about the future of AI infrastructure. Meta recently announced its intention to sell computing power to external clients, prompting questions regarding whether the current AI infrastructure buildout is exceeding actual demand—a sentiment echoing concerns that had previously circulated within the sector.
The commentary surrounding inflation also shifted markedly, following remarks from Federal Reserve Governor Christopher Warsh during the ECB forum in Sintra. Warsh noted that inflation risks appear to have diminished, a notably softer stance compared to the hawkish tone of the Fed’s June projections, which had resulted in significant capital outflows from exchange-traded funds (ETFs) in the weeks following.
Amid this backdrop, the U.S. dollar weakened, and treasury yields fluctuated as traders braced for Friday’s crucial U.S. jobs report. The outcomes of this report may serve as a pivotal factor for future Federal Reserve policy decisions. A robust jobs report could provide the Fed with justification to maintain a restrictive monetary policy, while a weaker report might revive discussions around possible rate cuts. The forthcoming data is poised to set the tone for the trading landscape in July, a month that traders are closely monitoring, particularly in light of Bitcoin’s unusual first-half performance, which has positioned it firmly within the realm of a bear market.
