For Eun bi, a civil servant in her thirties, the dream of a lavish wedding next April has suddenly become a source of anxiety. Like millions of other South Koreans lured by the artificial intelligence boom earlier this year, she poured her life savings into semiconductor giants like SK Hynix and U.S.-based chip funds. However, after the benchmark KOSPI index plummeted nearly 40 percent from its June peak, Eun bi watched tens of thousands of dollars vanish from her portfolio, leaving her to wonder if she will have to scale back her ceremony or scrap her honeymoon entirely.
This wave of financial heartbreak reflects a broader trend where rookie investors entered the market during one of the greatest rallies in South Korean history, only to see their windfall evaporate overnight. Many were encouraged by President Lee Jae Myung’s promises to modernize the domestic stock market and make it more profitable for ordinary citizens. While the index has recovered some ground since July, extreme volatility continues to plague traders. The KOSPI recently suffered sharp daily drops despite being up significantly since the start of the year, highlighting a precarious environment fueled by heavy reliance on a few tech titans.
Critics argue that the government played a dangerous role in this instability by approving risky leveraged investment products just weeks before the market turned. These tools allowed investors to bet double on the daily movements of specific stocks, essentially creating what political opponents describe as a leverage trap for young people. This policy failure has contributed to a slump in President Lee’s approval ratings, which have hit their lowest point as voters link his administration’s push for accessibility with an increase in reckless speculation and personal debt.
Market analysts suggest that while government policy provided the tools for these losses, structural issues within the KOSPI also played a part. With Samsung Electronics and SK Hynix accounting for more than half of the index’s value, any tremor in the global chip sector sends shockwaves through the entire national economy. For those who borrowed heavily via margin loans to chase AI gains, the crash resulted in forced liquidations by brokerages, turning hopeful investments into lasting financial trauma and transforming the stock market into a central flashpoint for Korean politics.