South Korea's benchmark stock index suffered one of its sharpest single-day drops in years on Monday, plunging nearly nine percent within minutes of opening and triggering an automatic 20-minute trading halt, as a global sell-off in technology stocks combined with fresh hostilities between Iran and Israel rattled financial markets across Asia.

The Korea Composite Stock Price Index (Kospi), which tracks the Seoul Stock Exchange and is heavily weighted toward technology companies, fell as much as 8.8 percent before stabilising at around five percent lower after trading resumed. The circuit breaker mechanism — activated for the third time this year — is designed to pause trading and prevent panic selling from spiralling out of control. Major South Korean tech firms bore the brunt: chipmaker Samsung Electronics fell more than eight percent, memory chip rival SK Hynix dropped over seven percent, and conglomerate SK Group shed nearly eleven percent. The South Korean won also slid to its lowest level against the US dollar since March 2009, touching 1,555 won per dollar.

The sell-off was driven by several converging pressures. A stronger-than-expected US jobs report for May — showing more than double the number of new positions than forecast — reignited fears that the US Federal Reserve may raise interest rates, pushing down bond markets and technology shares globally. On Wall Street the previous Friday, the Nasdaq composite fell four percent, with major chipmakers Nvidia, Broadcom, and Micron all recording steep losses. Asian markets with large technology sector exposure, including Tokyo's Nikkei 225 (down around four percent) and Taipei, felt the shockwaves most acutely. Separately, Israel struck military targets in western and central Iran on Monday, including explosions reported in Tehran, Tabriz, and Isfahan — the first such exchange since a ceasefire between the two countries and the United States was reached in April. Iran warned the strikes would continue throughout the week. The escalation sent Brent crude oil, the global benchmark, surging 3.7 percent to around $96.50 a barrel, stoking inflation concerns and further unsettling investors.

Underlying the turbulence is a broader reassessment of the artificial intelligence investment boom that has propelled markets to record highs in recent months. Investors are now demanding evidence that AI spending is translating into real corporate revenue, and a below-forecast revenue outlook from US chipmaker Broadcom deepened those doubts. South Korean President Lee Jae-myung sought to reassure markets, saying he believed domestic shares remained undervalued despite the volatility. Analysts warned that this week would remain difficult, with US consumer price index data, major tech earnings, and the highly anticipated SpaceX stock market listing all on the calendar — each carrying the potential to swing sentiment further.