Chip Stocks Slump as Oil Falls

South Korea's Kospi index fell 3.5 percent to 5,484.38 by late Thursday morning, marking a steep decline for the benchmark gauge. The drop came as investors sold off shares in computer chipmakers and artificial intelligence firms. This movement occurred while other Asian markets generally advanced.

The selling pressure in Seoul followed a volatile session on Wall Street the previous day. The Dow Jones Industrial Average gained more than 3 percent on Wednesday, surging over 1,500 points. The S&P 500 rose 1.6 percent, and the Nasdaq composite climbed 1.4 percent. These gains followed the U.S. midterm elections, in which President Donald Trump's party lost its sole control of Washington.

Specific equities in the semiconductor sector bore the brunt of the downturn in Asia. Samsung Electronics shares dropped 5.7 percent, while memory chipmaker SK Hynix lost 7.4 percent. In Tokyo, the Nikkei 225 index declined 0.5 percent to 61,914.53. SoftBank Group, an investor in OpenAI, shed 5.3 percent. Tokyo Electron, a maker of chipmaking equipment, fell 7.7 percent, and Advantest, a testing equipment maker, dropped 9.4 percent. Taiwan's Taiex index lost 1.6 percent.

Markets with less exposure to the AI industry showed different results. Hong Kong's Hang Seng index jumped 2.8 percent to 24,597.59. The Shanghai Composite index edged up 0.1 percent. In Australia, the S&P/ASX 200 rose 1.9 percent to 9,003.40. These moves suggested a split in sentiment among regional investors regarding the post-election outlook.

Oil prices reacted to the shift in political control. Brent crude, the international standard, plunged 8.7 percent on Wednesday to $94.62 per barrel. By early Thursday, the price had retreated slightly to $93.91 per barrel, down 0.8 percent from the prior close. U.S. benchmark crude fell 1 percent to $87.27 per barrel. Investors priced in the possibility that a Democratic-led Congress could pressure the administration to scale back the war with Iran.

The decline in oil prices hurt major energy stocks that had rallied earlier in the year. ExxonMobil fell 4.6 percent, and ConocoPhillips dropped 5.2 percent. Conversely, renewable energy stocks rose as investors weighed the potential for new policy support. First Solar gained 4.6 percent, and Enphase Energy climbed 3.7 percent.

Defense stocks also retreated amid speculation on military spending. Lockheed Martin sank 6.9 percent, Northrop Grumman fell 4.5 percent, and General Dynamics lost 2.6 percent. Trump Media & Technology Group was among the largest decliners on Wall Street Wednesday, down 24.5 percent. The company's stock stands at $4.49, down from a peak of $175 five years ago. Tesla fell 3.3 percent, and SpaceX sank 3.8 percent as investors assessed risks associated with Elon Musk, a major donor to Republicans.

Currency markets reflected the shifting geopolitical and economic expectations. The U.S. dollar slipped to 157.96 Japanese yen from 158.41 yen in early Thursday trading. The euro strengthened to $1.1256 from $1.1228.