Japan’s Nikkei plunges 5.7%, South Korea’s Kospi falls 7.4% amid AI stock rout

The Nikkei 225 fell 5.7% and South Korea's Kospi dropped 7.4% in a sharp selloff concentrated in artificial intelligence-linked equities, according to the headline reporting the move. The transmission channel appears to be a risk-appetite reversal within the technology complex, where heavily weighted AI and semiconductor names transmit valuation shocks directly into index-level performance across both markets. The Kospi's larger decline reflects its concentrated exposure to memory chipmakers and hardware suppliers whose earnings are tied to AI infrastructure spending, while the Nikkei's broader industrial and export composition dampens its sensitivity to the same theme. Traders will be watching Nvidia's upcoming earnings and related capital expenditure guidance from hyperscale cloud providers, since any signal on AI spending durability would determine whether the rout reflects a re-rating of the sector or a transient positioning unwind.

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