South Korea’s stock market could be turning around — and some investors expect its U.S. counterpart won’t be far behind. Traders have viewed the Asian market as a sort of harbinger for U.S. stocks given its relatively high exposure to memory stocks. This booming — albeit volatile — cohort of chip names has been widely crowned the latest beneficiary of the artificial intelligence infrastructure buildout. South Korea’s Kospi index has dropped around 20% in July as investors took profits, putting it on track for its biggest monthly loss since 2008. Retail investors in South Korea who have loaded up into single-stock leveraged ETFs have also suffered steep losses recently. Still, the Kospi index is up around 60% in 2026, building on last year’s advance of more than 75%. .KS11 YTD mountain Kospi index, year-to-date The recent pullback could be coming to an end, according to JPMorgan’s trading desk. In a Tuesday note, the team said it remained overweight on Korea’s market and estimated that the leveraged ETF unwind is around three-fourths of the way done. JPMorgan isn’t the only firm with an optimistic outlook for the country’s market. TS Lombard described the recent drop as a sign of deleveraging from semiconductor stocks rather than a broader bust. Prices are discounting an approximately 45% normalization of memory earnings next year, according to the firm. Similarly, Bank of America’s strategists said selling pressure on the Korean market may be “losing momentum” after the recent drawdown. The bank cited that the country’s broader market saw bigger losses than its largest stocks for the first time since March, which previously marked a local bottom. To be sure, it’s already been a volatile ride for investors. The Kospi index dropped just over 12% in one early March session, which marked its worst day on record .
The sell-off in Korean stocks may soon subside. That could be good news for U.S. markets
Jul 22, 2026
