SK Hynix drops nearly 10% on its second day of trading in the US, volatility in South Korean chip sector spreads to America

SK Hynix fell nearly 10% on its second day of listing in the US. After the South Korean regulators warned of overheating in the chip sector, the KOSPI index fell nearly 10% on June 23, triggered a circuit breaker on June 26, and dropped about 9% again on July 13 due to risks related to Iran, triggering another circuit breaker. After the sell-off on June 23, the Nasdaq fell more than 2%. Following the KOSPI drop on July 13, the Nasdaq closed down 1.55%. SK Hynix's US listing was about 7 times oversubscribed, bringing South Korea's high-leverage, high-volatility stocks into US investor portfolios. Leverage by South Korean retail investors has amplified volatility in the chip sector, impacting global AI demand expectations, while the repricing of US Treasuries is tightening liquidity.