Asian equities split sharply on Tuesday, May 26, as Seoul’s KOSPI broke above the 8,000-point mark for the first time in its history, while most other regional benchmarks retreated after US military strikes on Iran overnight dashed hopes of an imminent deal to reopen the Strait of Hormuz.
At the close, the KOSPI stood at 8,047.51 (+2.55%) — a record-breaking session powered by semiconductor heavyweights, automakers, and shipbuilders. The gain stood in stark contrast to a broadly weaker Asian session in which the Nikkei, Hang Seng, and most Southeast Asian indices drifted lower under the weight of renewed geopolitical uncertainty.
Korea: KOSPI Sets All-Time High Above 8,000
The KOSPI Composite Index closed at 8,047.51, up 199.80 points (+2.55%) from the prior close of 7,847.71, touching an intraday high of 8,131.15 — a new all-time record. (Yahoo Finance)
The session’s standout movers:
- SK Hynix surged +5.72% on continued AI-driven demand for high-bandwidth memory (HBM). (Yahoo Finance: 000660.KS)
- Samsung Electronics gained +2.22%, lifted by optimism over chip export normalization and strong DRAM pricing trends. (Yahoo Finance: 005930.KS)
- Automakers and shipbuilders added further broad-based momentum, according to an AFP report via Yahoo Finance.
The KOSDAQ also advanced, gaining 11.39 points (+0.98%) to close at 1,172.52 from a prior close of 1,161.13. (Yahoo Finance)
The Korean won strengthened meaningfully against the dollar: USD/KRW settled at 1,504.37, down 0.85%, signaling improved risk appetite toward Korean assets. (Yahoo Finance: KRW=X)
Japan: Nikkei 225 Edges Lower on Middle East Caution
Japan’s benchmark Nikkei 225 closed at 64,996.09, slipping 162.10 points (-0.25%) from a prior close of 65,158.19. The index touched an intraday high of 65,317.69 before fading on geopolitical concerns. (Yahoo Finance)
Risk-off sentiment stemming from renewed US-Iran hostilities capped upside, though the pullback was modest. The Japanese yen index edged down fractionally (-0.17%), providing a partial offset for export-oriented names.
Greater China: Flat to Marginally Lower
Hong Kong’s Hang Seng Index closed essentially unchanged at 25,599.45 (-6.58 / -0.03%), just barely below its prior close of 25,606.03. The intraday range of 25,431.17–25,768.38 reflected hesitant price action without a clear directional catalyst. (Yahoo Finance)
Mainland China’s Shanghai Composite dipped 7.20 points (-0.17%) to 4,145.37, while the broader macro environment — rather than any China-specific news — drove the mild weakness. (Yahoo Finance)
Southeast Asia and the Pacific: Broad Softness
The rest of Asia largely tracked lower in a risk-off tone, per Yahoo Finance World Indices:
- Taiwan (Taiex): 43,525.37 (−0.27%) — TSMC and broader tech gave back ground.
- Singapore (STI): 5,028.80 (−0.82%) — Financial and energy-linked names weighed on the index.
- India (S&P BSE Sensex): 76,009.70 (−0.63%) — Selling accelerated in afternoon trade.
- Indonesia (IDX Composite): 6,130.19 (−1.23%) — The region’s weakest session, with energy and commodity stocks hit by crude oil volatility.
- Malaysia (FTSE Bursa KLCI): 1,699.02 (−0.55%)
- Australia (S&P/ASX 200): 8,657.80 (−0.39%)
- New Zealand (S&P/NZX 50): 13,069.74 (+0.77%) — One of the few gainers outside Korea.
Macro Backdrop: US Strikes Iran, Oil Swings, New Fed Chair in Focus
US-Iran Military Strikes and the Strait of Hormuz
The dominant macro driver on Tuesday was a fresh escalation in the US-Iran war. According to an AFP report via Yahoo Finance, US forces attacked missile sites in southern Iran and intercepted boats attempting to lay mines in the Strait of Hormuz — the critical chokepoint through which roughly 20% of global oil supply passes.
A fragile ceasefire had been in place since April 8, with Washington and Tehran working toward a deal to permanently reopen the waterway. Markets had rallied Monday on reports that an agreement was close. Tuesday’s strikes tempered those hopes, though Iranian negotiators were simultaneously in Doha for another round of talks — keeping alive some prospect of a resolution.
Oil: Volatile, Holding Below $100
Brent crude jumped more than 3% early in the Asian session on the strike news, as the AFP report noted, but the move was ultimately contained. “The increase in oil prices is modest, underlining the market’s strong belief that the Strait of Hormuz will reopen,” said Arne Lohmann Rasmussen, commodities analyst at Global Risk Management, as quoted in the AFP report. Brent settled around $96/barrel — still below the $100 level it had briefly surpassed before the April ceasefire. (Yahoo Finance: BZ=F)
New Fed Chair and the Rate Path
Kevin Warsh was sworn in as Federal Reserve Chair the previous Friday, pledging to be “reform-oriented.” The AFP noted that higher energy prices stemming from Middle East conflict could limit the Fed’s ability to cut rates — a key variable for equity valuations globally. US CPI data due later this week will be watched closely for any signal on the inflation trajectory. (Source: AFP/Yahoo Finance)
US Markets: Post-Memorial Day Catch-Up
US equity markets were closed Monday, May 25 for Memorial Day. Futures pointed to a firm Tuesday open: S&P 500 futures +0.67%, Nasdaq futures +1.06%, Dow futures +0.51%. The positive setup suggested US markets were ready to catch up to the Iran ceasefire optimism that had boosted prices going into the long weekend, even as the Asian session had been more cautious. (Yahoo Finance)
What Investors Should Watch Next
- US-Iran Doha Talks: The outcome of ongoing negotiations remains the single biggest catalyst for oil, Korean energy plays, and Asian risk sentiment broadly. A deal to reopen the Strait of Hormuz could trigger a sharp drop in crude and a relief rally across equities. Check the Economic Calendar for scheduled releases and events this week.
- US CPI Release: Due later this week. If inflation surprises higher — partly due to energy — it could further delay Fed rate cuts and pressure equity multiples.
- KOSPI at 8,000: Watch whether Samsung and SK Hynix can sustain their AI/HBM-driven momentum. Any softening in chip export policy or demand signals from hyperscalers could test this key level. Track the KOSPI indicator page on ECONPLEX.
- Brent Crude Trajectory: A confirmed Hormuz reopening deal would likely send Brent sharply lower — a significant tailwind for oil-import-heavy economies including Japan, Korea, and India.
- Fed Chair Warsh’s Early Signals: Any public remarks from Warsh will be parsed closely. A “reform-oriented” Fed means less predictable forward guidance, adding to near-term uncertainty for fixed-income and equity markets alike.
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Sources
- AFP / Yahoo Finance — “Oil rebounds, stocks drop as US strikes douse Iran war hopes” (May 26, 2026)
- Yahoo Finance — KOSPI Composite Index (^KS11)
- Yahoo Finance — KOSDAQ Composite Index (^KQ11)
- Yahoo Finance — Nikkei 225 (^N225)
- Yahoo Finance — Hang Seng Index (^HSI)
- Yahoo Finance — World Indices Overview