Top Stories This Morning: Market Crash in Korea, Qualcomm Prepares AI Deal, Micron to Invest in Anthropic

South Korean stocks plummeted as investors rushed to lock in profits following a record rally. Micron has reached an agreement with Anthropic to invest in the latest funding round for the developer of Claude ahead of its anticipated IPO. Qualcomm is in talks to acquire Modular, a developer of AI infrastructure software. Read about these and other topics in our roundup of key events as of the morning of June 23.

South Korea's Kospi index plummeted by more than 9% during trading on June 23, leading to a 20-minute trading halt. Shares of the largest chipmakers, SK Hynix and Samsung Electronics, fell by more than 12% and 10%, respectively.

Investors are taking profits after a string of record highs, according to Bloomberg, which explains the sell-off. This year, the KOSPI has been the best-performing major stock index in the world. SK Hynix shares have risen by nearly 350% since the start of the year.

One of the factors contributing to the market’s overheating was the active use of borrowed funds by retail investors. According to the Korea Financial Investment Association, margin debt—the amount of funds borrowed to purchase stocks—reached a record 38.5 trillion won this month. The volatility was exacerbated by leveraged exchange-traded funds (ETFs) linked to chipmakers’ stocks.

“After a prolonged rally driven solely by market momentum, the Korean market has become more sensitive to shifts in retail investor sentiment. This is especially true now that all eyes are on the amount of their borrowed funds,” noted Gary Tan, portfolio manager at Allspring Global Investments. According to him, such movements are typically amplified by liquidity conditions and positions in derivatives.

The sell-off was further fueled by deteriorating sentiment in the U.S. technology sector on Monday, as well as anticipation of the quarterly earnings report from memory chip maker Micron Technology.

SpaceX shares fell 16.4% on Monday—the sharpest one-day decline since the company went public, according to Yahoo Finance. Following a 5% drop on Wednesday and a 3.6% decline on Thursday, the stock concluded a three-day losing streak, the publication notes. The stock is now trading just 14% above its IPO price of $135, although it rose to about $225 per share after its debut, and the company’s market capitalization briefly allowed it to join the ranks of the world’s four most valuable public companies.

The publication notes that the confirmation of SpaceX’s first-ever bond issuance put additional pressure on the stock price. The company plans to use the proceeds to repay the bridge loan it took out for the xAI acquisition.

Oil prices fell by more than 1.3% on Tuesday. Brent dropped below $76 per barrel, while WTI fell below $73. The U.S. Treasury Department issued a 60-day license authorizing the production, shipment, and sale of Iranian oil, including its import into the U.S. and settlements in U.S. dollars, according to CNBC. The market also reacted to reports of progress in negotiations between the U.S. and Iran in Switzerland. U.S. Vice President Jim Vance reported “significant progress,” while analysts at Citi noted that the trend in oil prices indicates growing investor confidence that the conflict is nearing an end.

Micron Technology has entered into an agreement with Anthropic to supply data storage and high-speed memory solutions, as well as to make strategic investments in the latest funding round for the developer of Claude ahead of its expected IPO, according to Reuters. The parties will also jointly analyze the performance of memory and data storage systems when running AI models.

The deal reflects the intensifying competition for computing resources in the field of artificial intelligence.

The acquisition could strengthen Qualcomm's position in its competition with Nvidia in the artificial intelligence market, the agency notes.

Qualcomm is in advanced talks to acquire Modular Inc., a developer of AI infrastructure software, according to Bloomberg. The deal could value the company at approximately $4 billion and be announced as early as the coming weeks. Modular was founded in 2022 by former Google employees Chris Lattner and Tim Davis and has raised about $380 million in funding, including a round last year that valued the company at $1.6 billion.

The acquisition could strengthen Qualcomm's position in its competition with Nvidia in the artificial intelligence market, the agency notes.

Meta is investing $900 million in the Indian fintech startup CRED, valuing the company at $4.5 billion, according to Reuters. As part of the deal, CRED founder Kunal Shah will take the helm at WhatsApp, replacing Will Catcart, who will move to another role within Meta. Meta will acquire a minority stake in the company without access to its customer data.

Founded in 2018, CRED serves approximately 17 million users each month and, according to its own data, processes more than 40% of credit card payments in India. The company will use the funds raised to accelerate growth and expand its product line.

Investors have begun to take profits on technology stocks, which have been among the top performers this year, according to Bloomberg.

– The MSCI All Country World Index, one of the broadest indicators of the global market, fell 0.6%. The Asian stock index plummeted 3.4%. Investors are once again concerned that the rally among the largest chipmakers has gone too far, according to the agency.

— Japan's broad-based Topix index fell 1.3%, while the Nikkei 225 fell 1.7%.

— Hong Kong’s Hang Seng Index fell 1.1%, while mainland China’s CSI 300 Index fell 1.5%.

— Australia's S&P/ASX 200 fell 0.3%.

— S&P 500 futures plummeted 1.2%, Nasdaq Composite futures dropped 2% outright, and Dow Jones Industrial Average futures fell 0.4%.

This article was AI-translated and verified by a human editor