South Korea’s Kospi Pulls Back From 8,000 as Trump-Xi Summit Continues

CNBC reported Friday that South Korea’s Kospi 8000 milestone proved short-lived, with the benchmark index shedding 1.35% after briefly setting a new record during early Asian trading.

The retreat came as investors closely monitored a second day of high-stakes diplomatic talks between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing.

Markets Across Asia Turn Lower

The pullback was not confined to Seoul. Japan’s Nikkei 225 fell roughly 0.9%, while Australia’s S&P/ASX 200 dropped around 0.25%. Hong Kong’s Hang Seng slipped 0.39%, and China’s CSI 300 opened near flat. South Korea’s smaller-cap Kosdaq saw a steeper decline of 2%.

Earlier optimism that summit progress could ease trade and technology export restrictions had briefly lifted regional sentiment. Chipmaker-heavy indexes were particularly sensitive to any signals from Beijing.

Also Read: U.S.-China Trade Truce Sends Markets Surging in May

Background: A Rally Built on Chips and AI

The Kospi’s milestone run has been remarkable. The index crossed 7,000 for the first time on May 5, lifted by surging valuations in its technology heavyweights. Samsung Electronics hit a record market capitalization above $1 trillion, helping power the broader index.

That concentration, however, has become a growing concern among asset managers. Samsung and SK Hynix together accounted for a record 42.2% of total Kospi weighting in May, according to Manulife Investment Management. The dominance of two artificial intelligence-linked chipmakers leaves the index exposed to any deterioration in tech sentiment.

Samsung shares fell 1% Friday after its labor union announced a willingness to resume wage negotiations. Talks had stalled, but the union indicated it would return to the table after June 7.

Also Read: Samsung Eyes AI Chip Dominance as Market Cap Crosses $1 Trillion

Xi’s Taiwan Warning Adds a New Layer of Risk

The diplomatic backdrop grew more complicated Thursday. Xi cautioned Trump that mishandling the question of Taiwan independence could lead to direct “clashes and even conflicts” between the two powers. The blunt warning signaled that even as both sides engage on trade and technology, deeper fault lines remain unresolved.

Trump’s Beijing delegation included Tesla CEO Elon Musk and Nvidia chief Jensen Huang, reflecting the summit’s heavy technology and commerce focus.

Wall Street, meanwhile, recorded fresh all-time highs overnight. The Dow Jones Industrial Average reclaimed 50,000, closing at 50,063 after Cisco Systems posted strong quarterly earnings. The S&P 500 ended at 7,501, with both indexes achieving record closes.

Read Next: Trump and Xi Meet in Beijing as Trade and Tech Tensions Simmer