South Korean shares rose on Wednesday, led by gains in heavyweight chipmakers, as investors awaited the U.S. Federal Reserve’s interest-rate decision later in the day.
The KOSPI advanced, with semiconductor stocks providing support after recent weakness in global technology shares. Investors were also closely watching the Fed’s policy guidance for clues on the future path of interest rates.
Read more: Global Market Today: Asian stocks steady as traders await Fed decision
Asian markets were trading cautiously ahead of the Fed decision, with South Korea’s benchmark among the region’s stronger performers. The broader MSCI Asia-Pacific index outside Japan also edged higher after four consecutive sessions of declines.
Chip stocks support KOSPI
Shares of major South Korean chipmakers gained, helping lift the technology-heavy benchmark. Semiconductor companies have remained a key driver of South Korean equities amid strong demand linked to artificial intelligence and high-performance computing.
Samsung Electronics and SK Hynix have benefited from robust demand for memory chips. Reuters reported last week that the two companies had announced shareholder-return plans totalling more than 130 trillion won ($97 billion) for 2026, supported by strong cash flows from the AI boom.
SK Hynix, the world’s second-largest memory-chip maker, has also reported strong earnings as demand for AI-related memory products remains elevated. The company’s second-quarter operating profit reached 60.54 trillion won.
Read more: Decision Day Guide: Fed seen hiking interest rates in defiance of Trump
Fed decision in focus
The Federal Reserve’s policy decision was the main focus for investors across Asian markets. Financial markets were pricing in a 25-basis-point increase, with the central bank’s accompanying guidance expected to be closely watched for indications of further tightening.
The prospect of higher U.S. interest rates has kept pressure on risk-sensitive assets, while rising Treasury yields have added to market volatility. The U.S. 10-year Treasury yield briefly moved above 5% on Tuesday, its highest level since 2007, Reuters reported.
Higher U.S. yields can also influence capital flows into emerging markets by making dollar-denominated assets relatively more attractive.
Won and broader market backdrop
The South Korean won was also being monitored as investors assessed the impact of higher U.S. yields and shifting expectations for monetary policy.
South Korean equities have remained sensitive to global technology-sector moves and changes in expectations for U.S. interest rates. Earlier this year, the KOSPI suffered a sharp sell-off when stronger U.S. employment data increased expectations of a Fed rate hike, with Samsung Electronics and SK Hynix among the stocks hit hardest.
With the Fed decision due later on Wednesday, investors were expected to focus not only on the rate announcement but also on policymakers’ projections and guidance for the months ahead.
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