South Korea’s KOSPI tripped circuit breakers in early Monday local trading, ultimately falling more than 8% intraday, an abrupt reversal for what had been the top-performing major market in the world this year. The question hanging over U.S. traders: would the contagion reach the Nasdaq when New York opened?
What’s Happening in Overnight Trading
The setup was alarming. The KOSPI had still been up roughly 75% year-to-date coming into the session, yet the index shed about 15% in the prior week alone. Samsung Electronics and SK Hynix together account for more than half the KOSPI’s total market capitalization, and both had surged well over 150% in 2026 before the reversal. The iShares MSCI South Korea ETF (NYSEARCA:EWY), the cleanest U.S.-listed proxy for Korean equities, had already tumbled 7.7% on Friday after Broadcom reported its fiscal Q2 earnings and guided Q3 AI semiconductor revenue at $16 billion, falling short of analyst expectations of $17.2 billion. Broadcom also left its full-year AI revenue target of $56 billion unchanged, disappointing investors who had expected a raise after first-half results came in strong. EWY ended the prior week down nearly 15%. Compounding the pressure, retail margin debt in South Korea had reached a record 37.74 trillion won as of June 4, leaving leveraged accounts exposed to margin calls and forced selling when the market gapped lower.
U.S. futures were mixed and unsettled. Nasdaq futures sat up about 0.16% as of 9:45 p.m. ET, while S&P 500 and Dow futures were red. Reports that Iran had fired missiles at Israel added geopolitical weight to an already nervous overnight session. In a Financial Times interview Sunday night, President Trump said of Israeli Prime Minister Benjamin Netanyahu: “I call the shots. I call the shots. He doesn’t call the shots,” and said Israel would have to accept a ceasefire. That uncertainty layered on top of the pressure already built on Friday when Treasury yields spiked on a stronger-than-expected May jobs report.
Stocks to Watch Monday
The contagion pathway ran straight through the Invesco QQQ Trust (NASDAQ:QQQ). Top holdings NVDA (9.74%), MSFT (8.63%), AAPL (7.95%) and AVGO (5.57%) all depend heavily on Korean memory supply chains, now rattled by the KOSPI collapse. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) CEO Jensen Huang was in the middle of a five-day Seoul visit and had just announced a cluster of multi-year AI deals with four South Korean companies: SK Hynix (named NVIDIA’s largest memory partner), SK Telecom, Naver, and Doosan Group. Financial terms were not disclosed. Huang confirmed NVIDIA already purchases billions of dollars annually from SK Hynix and that this volume will grow substantially. He was not publicly rattled by the market chaos. “Everybody should be very excited,” he told reporters. “They can now buy stock at a cheaper price.”
Update 1: Futures at Midnight
U.S. futures were holding overnight. As of midnight, the Nasdaq was up about 0.66% while S&P 500 futures were up 0.22%. On platforms with 24-hour trading, NVIDIA was up 1.2% overnight and Micron was up 4%. The KOSPI was rebounding from its session lows, which reduced some of the alarm. Shares tied to the Nikkei 225, however, were still down 3.78% heading into the Tokyo afternoon session. Japan’s losses reflected broader regional contagion, partly driven by forced unwinding of yen carry trades as investors raised cash.
Update 2: Morning Futures at 8 a.m.
By 8 a.m. ET, Nasdaq futures were solidly in the green, up 1.25%, and S&P 500 futures had risen 0.66%. Trump continued to insist negotiations with Iran were ongoing, but reports pointed to Israeli strikes on petrochemical facilities inside Iran.
NVIDIA shares were up 2.25% in premarket trading. The biggest movers were stocks that had sold off hardest on Friday. Marvell Technology (NASDAQ:MRVL) shares were up 8.6% in premarket after S&P Dow Jones Indices announced Friday that the company would join the S&P 500 on June 22, replacing Pool Corp. and The Campbell’s Company. Micron shares were up 6.9% ahead of the open.
Update 3: Nasdaq Gains Holding into Afternoon Trading
As of 12:05 p.m. ET, the Nasdaq was up 1.5%, the S&P 500 was up 0.71%, and the Dow Jones was up 0.20%. The session ended up being a decisive rebound rather than a spillover event.
The Information Technology sector led all groups, up 2.46%. Energy followed at 1.16%. The two weakest sectors were Communications Services (down 1.22%) and Utilities (down 1.15%). Marvell had recaptured a large portion of Friday’s losses by midday, with shares up 13.7%. Intel surged 12.8% and Micron gained 10.7%, both recovering from the prior week’s semiconductor-driven selloff.
Editor’s note: This article was updated to reflect that the KOSPI ultimately fell more than 8% intraday (from the original live reading of 7.25%), that Broadcom’s Q3 AI revenue guidance of $16 billion fell short of the $17.2 billion analyst consensus, that Jensen Huang’s Seoul deals spanned four companies (SK Hynix, SK Telecom, Naver, and Doosan Group), and that South Korean retail margin debt had reached a record 37.74 trillion won ahead of the crash. A typo (“S&P 5000”) has also been corrected.