On October 15, 2026, the Kospi closed at 5,554.22, down 454.59 points, or 7.57%, from the previous trading day, its lowest closing level in six months.
The index fell more than 9% intraday, triggering a circuit breaker. Samsung Electronics and SK Hynix, two bellwethers of the South Korean market, also plunged about 9.5% and 11.1%, respectively, driving the index lower.
The sell-off began with the U.S. September consumer price index (CPI), but markets were concerned not only about higher-than-expected inflation. They also worried about how further interest rate hikes would affect financing for AI infrastructure companies and demand for semiconductors.
Hopes for an End to Monetary Tightening Ahead of the CPI Release
On October 13, local time, the day before the U.S. consumer price index was released, New York Federal Reserve President John Williams told Bloomberg in an interview that he still believed one more interest rate hike this year could be appropriate, but did not currently see a need for further hikes next year.
His comments suggested that inflationary pressure remained but might not require sustained monetary tightening. Markets began to expect that the interest rate hike cycle would not be prolonged.
Those expectations began to falter the very next day, when U.S. inflation figures exceeded market forecasts.
September CPI, released by the U.S. Bureau of Labor Statistics (BLS) on October 14, rose 0.6% from the previous month and 3.7% from a year earlier. A surge in energy prices, including a 9.1% rise in gasoline prices over the month, drove the overall increase.
The rise in headline CPI had been expected to some extent because geopolitical conflict in the Middle East had pushed energy prices sharply higher. But core CPI, which excludes food and energy, rose 0.3% from the previous month, above the market forecast of 0.2%, heightening concerns about further tightening.
Inflationary Pressure Spreads Beyond Energy Prices
The components of core CPI also showed upward pressure. The monthly increase in shelter costs accelerated from 0.3% in August to 0.4% in September, while owners’ equivalent rent rose 0.3%, up from 0.2%.
The increase in used-car prices also accelerated from 0.4% to 0.7%, while clothing prices shifted from no change the previous month to a 0.3% rise. Prices climbed across several categories.
The figures raised concerns that core inflation could slow more gradually than expected, even apart from the rise in energy prices. They also suggested that if prices in categories that adjust relatively slowly, such as shelter, remain elevated, monetary tightening to curb inflation could last longer.
Rising Odds of a Rate Hike and a Shock to the Treasury Market
After the inflation figures were released, market expectations for another Federal Reserve interest rate hike rose rapidly.
The probability of an October rate hike reflected in CME FedWatch rose from about 22% before the CPI release to as high as 39.3% afterward. That did not mean a hike had become more likely than a hold, but it was a notable shift: markets had begun to price in a greater risk of further tightening.
Concerns about tightening also reached the U.S. Treasury market. The 10-year Treasury yield climbed above 5.3% intraday immediately after the CPI release. Although the yield later pulled back somewhat, worries about companies’ borrowing costs did not readily fade.
When companies issue bonds or take out loans, borrowing costs generally reflect both benchmark Treasury yields and factors such as their own credit risk. If rising Treasury yields coincide with greater investor risk aversion, financing conditions can deteriorate further.
That makes AI infrastructure companies that borrow to invest in data centers and GPUs relatively more vulnerable than large technology companies with substantial cash holdings.
CoreWeave Bond Yield Tops 15%, Highlighting Credit Risk
One company at the center of these concerns was CoreWeave, an AI cloud infrastructure provider and a major Nvidia partner.
According to Bloomberg, CoreWeave’s unsecured bonds due in 2032 traded below 80% of face value on October 14, local time. Their yield in the secondary market rose above 15%, intensifying concerns about the company’s credit risk in the bond market.
The rise in yield as the bonds’ price fell means investors demanded greater compensation to hold them. It also raised concerns that the company could face a heavier burden when raising new funds or refinancing existing debt.
Elon Musk replied “Yikes” to an X post by venture investor Chamath Palihapitiya sharing the news, drawing further market attention to CoreWeave’s financial structure.
AI Infrastructure Financing Pressures Spread to the Semiconductor Market
Neocloud companies such as CoreWeave have expanded by acquiring large quantities of Nvidia’s high-performance GPUs, building data centers and then providing computing resources to AI developers and corporate customers.
Rapid growth in demand for AI services has fueled high expectations for this business model. But because buying GPUs and building data centers require enormous upfront investment, access to financing remains a crucial factor.
CoreWeave’s capital expenditure in the second quarter of 2026 was about $9.4 billion, up sharply from $6.8 billion in the previous quarter, illustrating the scale of funding going into AI infrastructure expansion.
Those figures are not evidence that investment has contracted. Rather, they show that large-scale capital spending has continued so far. The market’s concern is whether that expansion can continue in a high-interest-rate environment.
If rising financing costs lead neocloud companies to delay or scale back investment in new data centers, orders for GPUs and server semiconductors could be affected. The impact could also reach memory chipmakers that supply the high-bandwidth memory (HBM) used in Nvidia’s GPUs.
Concern about that scenario spread from the plunging share prices of U.S. AI infrastructure companies to the global semiconductor sector. In South Korea, the simultaneous declines in Samsung Electronics and SK Hynix were major contributors to the Kospi’s sharp fall.
The rise in CoreWeave’s bond yield alone does not establish that the entire AI industry faces a financial crisis or that semiconductor demand has actually fallen. But the sell-off has prompted markets to watch not only AI companies’ growth but also their financing conditions and future capital spending plans.
