Seoul stocks drop 1.29% as chipmaker earnings, Fed decision loom
Synopsis
South Korean stocks slid over 1.29% on Monday as markets braced for a double verdict: AI chipmaker earnings from Samsung and SK Hynix, and the U.S. Fed's rate call. Defence contractor LIG D&A's 10.67% crash over bribery allegations added a domestic shock to an already nervy session — while KUIC quietly secured Aa2 and AA sovereign-level credit ratings for Seoul's $350 billion U.S. investment pledge.
Key Takeaways
The KOSPI fell 71.49 points (1.29%) to 5,478.81 as of 11:20 am on Monday, 26 October .
Samsung Electronics shed 1.62% ; SK Hynix edged up 0.08% ahead of their respective earnings releases this week.
LIG D&A crashed 10.67% after South Korea's arms procurement agency reportedly considered revoking its defence contractor status over bribery allegations.
Federal Reserve begins its two-day policy meeting on Tuesday ; rates are widely expected to remain on hold.
State-run KUIC received its first credit ratings — Aa2 from Moody's and AA from S&P — for South Korea's $350 billion U.S. investment vehicle.
The Korean won rose 3.2 won to 1,323.0 won per U.S. dollar.
South Korean stocks fell sharply on Monday, 26 October, with the benchmark Korea Composite Stock Price Index (KOSPI) sliding 71.49 points, or 1.29 percent, to 5,478.81 as of 11:20 am local time, as investors adopted a wait-and-watch stance ahead of major chipmaker earnings and the U.S. Federal Reserve's monetary policy decision.
What Is Driving the Caution
Two key events are dominating investor sentiment this week. First, quarterly earnings reports from SK Hynix — due on Wednesday — and Samsung Electronics — due on Thursday — are expected to offer critical signals on the outlook for artificial intelligence (AI) chip demand and global memory prices. Second, the U.S. Federal Reserve begins its two-day policy meeting on Tuesday (U.S. time), with markets widely expecting the central bank to hold interest rates steady amid persistent inflationary pressures.
Key Movers on the KOSPI
Market bellwether Samsung Electronics shed 1.62 percent, while chipmaker SK Hynix inched marginally higher by 0.08 percent. LG Energy Solution fell 1.7 percent, and top automaker Hyundai Motor slid 2.88 percent. The steepest single-stock decline came from defence contractor LIG D&A, which tumbled 10.67 percent after reports that South Korea's arms procurement agency is considering revoking the firm's defence contractor designation in a small drone project over bribery allegations.
Currency and Credit Ratings
The Korean won was trading at 1,323.0 won against the U.S. dollar as of 11:20 am, up 3.2 won from the previous session's close — a modest strengthening against the greenback even as equities retreated.
In a separate development, the state-run Korea-U.S. Strategic Investment Corporation (KUIC), tasked with implementing Seoul's $350 billion investment pledge to the United States, received its first credit ratings since its launch earlier this year. Moody's Ratings assigned it an Aa2 issuer rating with a stable outlook, while S&P Global Ratings assigned a long-term credit rating of AA — both in line with South Korea's sovereign ratings.
Broader Context
The KOSPI's decline reflects a wider global hesitancy ahead of two macro catalysts: U.S. monetary policy direction and the health of the semiconductor cycle. South Korean chip stocks have been a barometer for AI-driven demand, and any earnings disappointment from Samsung or SK Hynix could ripple across global tech indices. This is the second consecutive session of losses for the index. The LIG D&A episode adds a domestic corporate governance dimension to an already cautious market.
With the Fed meeting outcome and major chipmaker results all due within days, market direction for the rest of the week is likely to be determined by these twin triggers.
Point of View
But the stakes this week are unusually high. Samsung and SK Hynix are not just Korean bellwethers — they are proxies for the entire AI chip supercycle thesis. If their earnings disappoint on memory pricing or AI demand signals, the selloff will not stay in Seoul. The Fed's rate hold is already priced in, which means any hawkish language on inflation could compound the damage. Meanwhile, the LIG D&A episode is a reminder that South Korea's defence sector — a growing export story — carries domestic governance risk that markets have not fully discounted.
NationPress
26 Oct 2026
Frequently Asked Questions
Why did South Korean stocks fall on 26 October 2026?
The KOSPI fell 1.29% to 5,478.81 as investors stayed cautious ahead of third-quarter earnings from major chipmakers SK Hynix and Samsung Electronics, and a U.S. Federal Reserve monetary policy decision expected later in the week. The uncertainty prompted broad-based selling across market heavyweights.
What earnings reports are investors watching this week?
SK Hynix is due to report on Wednesday and Samsung Electronics on Thursday. Both reports are being closely watched for clues on AI chip demand and global memory price trends, which have broad implications for global technology stocks.
What is expected from the U.S. Federal Reserve this week?
The Fed begins a two-day policy meeting on Tuesday (U.S. time), and markets widely expect it to keep interest rates unchanged given persistent inflationary pressures. Any hawkish commentary in the policy statement could, however, add further pressure to risk assets.
Why did LIG D&A stock crash over 10% on Monday?
Defence company LIG D&A tumbled 10.67% after reports that South Korea's arms procurement agency is considering revoking its defence contractor designation in a small drone project over bribery allegations. The firm has not yet commented publicly on the reports.
What are the new credit ratings assigned to KUIC?
The Korea-U.S. Strategic Investment Corporation (KUIC), the state-run entity managing Seoul's $350 billion U.S. investment pledge, received its first credit ratings: Aa2 with a stable outlook from Moody's, and AA from S&P Global Ratings — both in line with South Korea's sovereign credit ratings.
