Broadcom's disappointing performance outlook precipitated a rapid cooling of global artificial intelligence-related trades, exposing vulnerabilities in highly concentrated chip sectors. On Thursday, the South Korean KOSPI led the decline in the Asia-Pacific region, dropping 1.8% and highlighting bubble risks accumulated from leveraged fund expansion. Futures contracts on the Nasdaq 100 index fell by 0.5% after Broadcom tumbled 14% in after-hours trading, signaling that its transformation towards AI customers was progressing slower than anticipated. The AI Winners Basket Index, managed by UBS Group, also dropped by 1.4%, ending a four-day consecutive rise. This decline in Asia continued the weak trend seen on Wall Street, where the S&P 500 index's nine-day consecutive rise came to an abrupt halt.

Hawkish signals from Federal Reserve officials regarding interest rate hikes, combined with renewed tensions between the United States and Iran, further dampened risk appetite. South Korean Finance Minister Koo Yun-cheol held a joint meeting with Central Bank Governor Shin Hyun-song, Financial Services Commission Chairman Lee Eog-weon, and Financial Supervision Service Chairman Lee Chan-jin, promising to take 'immediate measures' to address severe fluctuations in the foreign exchange market. Officials warned that the balance of stock financing loans had reached a level not seen in nearly 20 years. Data compiled by Woofun AI shows that as of the first quarter of 2026, the balance of margin trading loans of the top ten securities firms approached 36 trillion KRW, almost doubling compared to a year ago. Among these investors, those aged 50 and above accounted for 62.3%, while the loan balance for those aged 60 and above soared from around 3 trillion KRW to over 8 trillion KRW within one year.

These developments significantly impacted global assets, with BTC plunging to around $64,000, the lowest level since February this year. Gold rose by about 1% due to increased buying at lower prices, while Brent crude oil ended its three-day rally, falling by about 1% to around $97 per barrel following news of a ceasefire agreement between Israel and Lebanon. European stock markets showed mixed trends as investors waited cautiously for Friday's US non-farm employment data. The Euro Stoxx 50 index rose by 0.13%, the UK FTSE 100 index fell by 0.12%, the French CAC40 index rose by 0.10%, and the German DAX index rose by 0.20%. The impressive performance of the KOSPI masked significant divergence among its constituent stocks; among 835 constituents, only 373 had risen this year. Samsung Electronics and SK Hynix saw increases of approximately 200% and 250% respectively, accounting for more than 40% of the KOSPI's weight, while the remaining stocks contributed less than 30% to the overall index gain.

The rapid expansion of leveraged speculative funds coincided with this highly concentrated upward trend. Data from the South Korean Stock Exchange showed that the total number of temporary suspension orders issued in the main board market this year reached the highest level since the financial crisis in 2008, with 20 'sidecar' programmatic trading suspension orders issued. According to the rules, when the KOSPI 200 futures index fluctuates by 5% or more for at least 1 minute, programmatic trading is suspended for 5 minutes. In the first quarter of 2026, the number of new securities accounts opened by people under 18 years old in South Korea increased by nearly 10 times compared to the same period last year. Woofun AI notes that Billy Leung, an investment strategist at Global X Management, stated that chip stocks had already risen significantly before financial reports, prompting investors with large unrealized profits to take profits.

Major institutions on Wall Street displayed clear differences in attitudes regarding the KOSPI's rapid rise. Goldman Sachs raised its target price for the KOSPI from 9,000 points to 12,000 points, stating that the rise in AI chip manufacturer stocks was likely to continue but warning that the risk of a pullback was increasing. Timothy Moe, the chief stock strategist for Asia-Pacific at Goldman Sachs, wrote that they were more optimistic about North Asia where profit growth is the strongest. Conversely, Citibank warned that the valuation of the South Korean stock market was at a high level among major global markets, suggesting that institutional risks related to labor relations might dampen foreign investors' long-term investment intentions. Rob Marshall Lee, an investor in emerging markets and the founding partner and chief investment officer of Cusana Capital, bluntly stated that the South Korean market is a huge bubble, pointing out that most South Korean companies had extremely low return on equity.

Hawkish statements from Federal Reserve officials further cooled market sentiment. Lorie Logan, the president of the Dallas Federal Reserve, said that policymakers might need to raise interest rates later this year to bring inflation back within target levels. John Williams, the president of the New York Federal Reserve, told Yahoo Finance that there was still uncertainty regarding interest rate prospects. Recent data showed that the number of new jobs created by US companies was the highest since January 2025, indicating that despite rising energy costs, hiring momentum remained strong. If Friday's non-farm employment data confirmed this, market expectations for Federal Reserve interest rate hikes would be further strengthened. The yield on 10-year US Treasury bonds fell slightly by 2 basis points to 4.48% on Thursday. Woofun AI analysis suggests that if US economic data continues to exceed expectations, investors may bet on the strengthening of the USD, especially against assets with low or zero yields such as the Japanese yen and gold.

Concurrently, sources familiar with the matter indicated that Japanese central bank officials were considering raising the benchmark interest rate by 25 basis points this month, pushing the Japanese yen stronger against the USD.