South Korea’s stock market recorded its biggest single-day decline since April 2025, prompting regulatory intervention to curb volatility.
The Korea Stock Exchange announced that it had activated a pause switch. This is the structure of the KOSPI index, which groups South Korea’s largest market capitalization companies. Triggers if the price of the KOSPI 200 futures contract traded on the previous day increases or decreases by more than 5%. For a moment.
This switch is sidecaris a safety mechanism that suppresses excessive volatility in the futures market and prevents fluctuations in the stock market.
he sidecar It does not completely paralyze the market.temporarily stops execution of scheduled orders. In the case of the Kosdaq, which primarily lists technology companies and small- and mid-cap stocks, the index is triggered when futures prices rise or fall by more than 6% from the previous closing price and remain unchanged for at least one minute.
This is a common emergency braking measure in South Korea. Give the market a break for investors to absorb information and avoid chain reactions.
Impact of the US Federal Reserve System
As reported by CriptoNoticias, last week Kevin Warsh was nominated by President Donald Trump to be the next US Federal Reserve Governor, sparking strong risk aversion in global markets. Because of Mr. Warsh’s record, High interest rates in the US may last longer than expectedputting pressure on volatile assets.
Gold and silver are particularly exposed in this context. Gold has corrected from its all-time high of $5,586 last Thursday to $4,731 in current trading. Approximately 15% decrease. Meanwhile, silver has plunged 34% from its peak of $121 to its current $78.
Bitcoin (BTC) also made concessions, It fell below $80,000 for the first time since April 2025.currently trading at around $77,800
This correction in digital currencies reflects the spillover of risk aversion following the sharp decline in precious metals. Despite the turmoil on the Seoul Stock Exchange, Western markets are showing the opposite movement. The S&P 500 and Nasdaq futures opened higher on Monday. As seen below, the Nasdaq rose from 25,477 points to 25,675 points and the S&P 500 rose from 6,931 points to 6,989 points, defying the Asian pessimism.
Wall street crossroads
The divergence suggests that while Asian investors are fleeing risks from FED uncertainty and the metals crash, Wall Street is betting on a soft landing supported by the corporate earnings season that begins this week in the fourth quarter of 2025.
Additionally, U.S. investors View the drop in gold and silver as an opportunity to move capital back into tech stocks Or it could be that he’s simply gaining momentum from initial fears about Warsh’s nomination.