The possible culprit behind the US stock market crash: South Korea's stock market

Driven by the global AI boom, South Korea's KOSPI index has more than doubled in a year. Samsung Electronics and SK Hynix account for 50% of the market cap.
Aside from extreme concentration, South Korea's stock market also has record-high leverage levels, and Korean retail investors have a long-standing gambling mentality, creating an extremely dangerous environment.
If a sharp correction occurs, it will not only hit South Korea but also deliver a severe blow to US stocks and other global markets.
What we are seeing now are just early warning signs. The KOSPI triggered circuit breakers and trading halts multiple times in June, with daily swings of 8-10% becoming almost the norm.
These two companies dominate AI memory production. If South Korea's stock market crashes—whether due to forced selling, margin pressure, or valuation resets—it will immediately raise concerns about HBM supply and pricing, directly impacting earnings expectations for major tech stocks like Nvidia.
If the Korean stock market collapses, US stocks will also plummet.
Especially in 2026, with stocks already accounting for a significant portion of U.S. household net worth, a stock market crash leading to a sharp decline in consumer spending would have a non-trivial impact on the economy.