South Korea’s stock market staged a dramatic Kospi Rally on Friday, with the benchmark index soaring nearly 18% after three days of heavy losses that erased hundreds of billions of dollars in market value. The rebound was led by semiconductor giants SK Hynix and Samsung Electronics, as renewed optimism over artificial intelligence (AI) investments lifted technology shares across Asia.

AI Optimism Drives Chip Stocks Higher

Investor confidence returned after stronger-than-expected earnings from Amazon and Microsoft reassured markets about the long-term outlook for AI spending. The positive results eased concerns that major technology companies were investing too aggressively in artificial intelligence.

SK Hynix, a key supplier of memory chips to **Nvidia>, climbed nearly 30%, while Samsung Electronics gained about 28%. Both companies had suffered sharp declines earlier in the week as investors sold AI-related stocks.

The rally also spread across the region, lifting technology shares in Japan and Taiwan as semiconductor companies recovered from recent losses.

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Regulators Move to Calm Markets

South Korean financial regulators introduced measures aimed at stabilizing markets following the sharp sell-off. The country has experienced heightened market volatility this year, driven largely by increased participation from retail investors.

The tech-heavy Kospi has triggered circuit breakers several times in 2026. These automatic trading halts are designed to slow panic selling during periods of extreme market volatility.

Despite the recent correction, the Kospi remains more than 50% higher than its level at the end of 2025. The index had more than doubled earlier this year before retreating from a record high reached in mid-June.

Strong US Earnings Boost Global Sentiment

The market recovery followed upbeat corporate earnings in the United States. Amazon shares rose more than 9% in after-hours trading, while Microsoft advanced over 15% after both companies reported results that exceeded analysts’ expectations.

The stronger earnings reinforced investor confidence that continued spending on AI infrastructure and advanced computing technologies could support future growth for the global technology sector.