South Korean Stocks Plunge Nearly 6% with Circuit Breaker Triggered; Japanese Market Drops 1,800 Points! Triple Blow from Tariffs, Oil Prices, and AI Concerns

U.S. President Trump's new tariffs on 60 trade partners officially took effect, sparking concerns over the global trade outlook. Combined with soaring oil prices and volatility in artificial intelligence (AI) stocks, investor confidence was further shaken, sending Asian equity markets sharply lower on Friday (24th), led by Japan and South Korea.

South Korea's Kospi index opened lower and continued to decline, briefly triggering a circuit breaker during trading. At press time, it was down 5.7%, nearly erasing all gains from earlier in the week, temporarily at 6,692.54 points. Major semiconductor stocks followed their U.S. peers lower, with SK Hynix plunging 8.3% and Samsung Electronics falling 7.6%.

The Nikkei 225 index dropped over 1,800 points, or 2.7%, temporarily at 64,604.84 points, heading for its third consecutive weekly decline. Kioxia plunged 9.5%, SoftBank Group fell 7.4%, and Tokyo Electron dropped 5.2%.

Washington's new tariffs on 60 trade partners officially took effect Friday, replacing the 10% temporary global tariff that expired the previous night, adding further pressure on Asia's export-driven economies. Japan, South Korea, and Taiwan face effective tariff rates between 10% and 12.5%, deepening market concerns over regional trade and manufacturing prospects.

U.S. stock futures were largely unchanged. Intel (INTC-US) provided some market support after reporting better-than-expected earnings, but Alphabet (GOOGL-US) and Tesla (TSLA-US) saw sharp share declines following their earnings reports the prior day, fueling market concerns over the sustainability of rising AI investment spending.

Meanwhile, Brent crude oil prices remained above $100 per barrel as attacks by Iran-backed Houthi militants in Yemen on Saudi oil tankers heightened fears of Middle Eastern oil supply disruptions. The U.S. launched fresh airstrikes on Iran, and Trump's threats of further military action raised concerns that the conflict could escalate further.

The latest developments have reignited inflation fears, with investors assessing the potential impact on global supply chains if key energy shipping routes remain disrupted for an extended period.

Chinese equities stood out relatively this week. Despite Friday's decline, the CSI 300 index is on track to gain about 3.2% for the week, ending a four-week losing streak.

Investors are positioning ahead of next week's meeting of China's Central Political Bureau. Markets expect policymakers to introduce additional measures to stabilize economic growth following weaker-than-expected second-quarter economic data.