KOSDAQ jumps 5% as AI stocks rebound, triggering sidecar

South Korea's tech-heavy KOSDAQ surged about 5% on Wednesday, triggering a buy sidecar as AI stocks rebounded across Asia ahead of Nvidia's earnings next week.

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South Korea's KOSDAQ index rose roughly 4.6% to near 700 in Wednesday's Asian session. The move triggered a buy sidecar, a five-minute suspension of program buy orders. It was the KOSDAQ's 38th sidecar of 2026 and its 21st on the buy side, after the KOSDAQ 150 index jumped more than 6%. The rally extended a regional recovery in AI stocks that began after last week's steep technology sell-off. Japan's Nikkei 225 gained 1.2% to about 61,190, its third straight advance.

What Happened to the KOSDAQ on Wednesday?

The KOSDAQ climbed almost 5% at its intraday peak, and the surge in the KOSDAQ 150 large-cap benchmark set off the sidecar. The halt applies only to computer-driven program buying. It does not stop trading in the broader market, and it is meant to cool momentum during sharp moves.

The larger KOSPI rose about 1.9% to near 5,340. That followed a 4.39% jump on Tuesday to close at 5,239, when sidecars were also triggered in both Korean markets. Chip heavyweights led the gains. SK Hynix (000660) rose about 5.5% and Samsung Electronics (005930) about 3%. Both had advanced sharply on Tuesday as foreign investors returned to Korean equities.

Why Are AI Stocks Rebounding?

AI stocks are rebounding because last week's sell-off was widely treated as overdone, and fresh AI-related news restored confidence. The decline was driven by concern that the Democratic sweep in the U.S. midterm elections could bring tighter limits on data-center development. Such limits would weigh on demand for AI chips and infrastructure. Investor unease over the scale of AI capital spending and the timeline to profitability added to the pressure.

Wall Street set the tone for the recovery. The Nasdaq Composite gained 2.74% and the S&P 500 rose 2.35% on Monday, the index's best day since April 8, as oil prices fell and buyers returned to semiconductors. In Asia on Tuesday, SoftBank Group (9984) surged 13.88%, SK Hynix rose 6.69% and Samsung 4.74%. Tokyo Electron gained 6.05%, Advantest 4.63% and TSMC (TSM) 2.24%.

How Did Other Asian Markets Trade?

Gains were concentrated in North Asia's chip supply chain. Japanese manufacturer confidence, as measured by the Reuters Tankan, reached its highest level in more than five years, helped by strong semiconductor demand. SoftBank slipped about 3% on Wednesday after reporting a quarterly loss of roughly 1.1 trillion yen, giving back part of Tuesday's surge.

China lagged the rally. The Hang Seng fell 0.9% to about 24,330, and the Shanghai Composite slipped 0.2%. Brent crude rose about 1% to $92.50 a barrel on reported strikes on Saudi Arabia's East-West pipeline and a tanker attack near the Strait of Hormuz. Energy costs remain a risk to the technology rebound.

Why Do Rapid Swings Keep Triggering Sidecars in Korea?

Korea's technology-heavy indexes, retail participation and program trading amplify moves in both directions. The KOSDAQ has now seen 38 sidecars this year. Of those, 21 were on the buy side, which reflects both sharp sell-offs and equally sharp recoveries.

Daily moves of 4% to 5% in a benchmark index are large by developed-market standards. They show how much capital is concentrated in a handful of AI-linked names and how quickly sentiment can reverse when that trade is questioned.

What Comes Next for AI Stocks?

The next catalyst is Nvidia (NVDA), which reports earnings next week. Its guidance on data-center demand and customer spending plans bears directly on the memory and equipment suppliers that led this week's gains, including SK Hynix and Samsung.

Macro conditions are less supportive than the equity rebound suggests. Persistent inflation readings have pushed expectations for federal reserve policy toward possible rate increases in December and March 2027, with the first cuts delayed to late 2027. Higher rates weigh on long-duration growth stocks, and they raise the bar for AI companies whose profits depend on heavy capital spending.

Policy risk adds to this. Any move in Washington to restrict data-center construction would affect demand for AI chips, and the new congressional balance makes that debate a recurring market theme.

Outlook

The KOSDAQ's 5% advance and sidecar mark a sharp recovery in AI stocks after a volatile week. Korean and Japanese chipmakers led, while China-linked markets and SoftBank lagged. Nvidia's earnings next week, together with inflation data, rate expectations, oil prices and U.S. data-center policy, will determine whether the rebound holds or reverses.