South Korean Stocks Lead Asian Declines as Cooling AI Trade Triggers $10 Billion Selloff

South Korean stocks led declines across Asia on Friday as investors pulled back from the artificial-intelligence trade, a move that also pressured U.S. futures and signaled a broader cooling in the market’s enthusiasm for chip and tech names. Bloomberg reported that the Nasdaq 100 fell and Dow Jones Industrial Average futures held up better as traders rotated away from technology after Broadcom’s earnings update tempered expectations for the AI rally.

The weakness in Korea is significant because the market has been one of Asia’s biggest winners this year, powered by heavy demand for semiconductors. Bloomberg said South Korea’s current-account surplus remained near record levels in April, underscoring the strength of the country’s chip-driven export boom, even as the stock market came under pressure. That contrast highlights a central tension for investors: the real economy in Korea is still benefiting from the AI buildout, but the equity market is increasingly vulnerable to any sign that the pace of investment may be slowing.

According to Bloomberg’s coverage of the Korean market, foreigners have been net sellers, with about $10 billion withdrawn in a week, adding strain to a rally that had lifted the Kospi sharply. The report said the $4.7 trillion market is now showing signs of stress after drawing intense attention for its rapid climb. That selling has raised concerns about market breadth, meaning gains were concentrated in a relatively small group of stocks rather than spread broadly across the market.

The pullback comes as investors reassess how much more room the AI theme has after a powerful run that pushed many indexes to record highs. Bloomberg cited Amundi, Europe’s largest asset manager, saying Asia’s AI-led stock boom still has room to run unless changing U.S. interest-rate expectations unsettle the hyperscalers driving the investment cycle. That suggests the market is not necessarily abandoning the theme, but it is becoming more sensitive to earnings, spending plans and the Federal Reserve outlook.

The move in Korea also matters beyond Seoul because the country is deeply tied to the global semiconductor supply chain. A slowdown in sentiment toward AI stocks can spill into Taiwan, Japan and U.S. markets, where chipmakers and related suppliers have been key beneficiaries of the trade. Bloomberg’s Asia Trade coverage on Friday framed the session as a test of whether the AI-driven surge can hold after signs of fatigue in U.S. tech stocks.

For now, the story is less about a collapse in fundamentals than about a market trying to judge how much optimism is already priced in. Korea’s strong trade and current-account numbers show the export engine is still running, but the stock market is reacting to the possibility that investors may be becoming more selective after months of relentless enthusiasm for AI.