Explained: Why South Korea's Kospi jumped 7% despite escalating Middle East tensions

South Korea's Kospi surged 7% led by a sharp rebound in semiconductor stocks, with SK Hynix rallying over 13% and Samsung Electronics up 8%, as IBM's CEO signalled customers were redirecting software and infrastructure spending toward hardware including memory chips. Goldman Sachs attributed Monday's steep decline in SK Hynix to roughly $5 billion of forced selling by leveraged ETFs rebalancing portfolios, while HSBC said improving AI-driven profitability should sustain cloud capex. US markets also closed higher after softer inflation data and strong bank earnings, lifting risk sentiment globally even as Middle East tensions persisted.