World's Hottest Stock Market Is Crushing Wall Street—And It's Not What You'd Expect

A historic rally has put South Korea at the center of the global equity spotlight in 2025, with its benchmark index crushing Wall Street returns—but that same blistering pace is now prompting regulatory intervention.

The World’s Top-Performing Stock Market In 2025

The KOSPI index, South Korea's main stock gauge, has surged more than 70% year-to-date through Nov. 4, 2025, making it the best-performing year for Korean equities since 1999.

This places it far ahead of major global benchmarks, including the tech-heavy Nasdaq 100, which is up around 22% over the same period.

The iShares South Korea ETF, iShares MSCI South Korea ETF (NYSE:EWY), has jumped 88% in 2025, its strongest annual return since the fund’s inception in 2000.

By comparison, the Invesco QQQ Trust (NASDAQ:QQQ), tracking the Nasdaq 100, has returned less than one-fourth of that, illustrating a massive outperformance of more than 66 percentage points by South Korean equities.

Chart: South Korea ETF Rockets Past Nasdaq 100 In 2025 Race

SK Hynix: Too Fast, Too Furious?

South Korea’s outsized rally in 2025 is primarily driven by just two players: Samsung Electronics and SK Hynix, with the latter being a key supplier of advanced memory chips to Nvidia Corp. (NASDAQ:NVDA).

Samsung has doubled in value this year, while SK Hynix has soared a staggering 240%.

Last week, SK Hynix said demand for its high-bandwidth memory chips—critical for AI hardware—will keep outpacing supply, after reporting blockbuster earnings. The Nvidia supplier has already sold out next year's HBM chip production amid the AI boom.

On Monday, shares of SK Hynix jumped 11%, marking their best single-day performance since March 2020. The rally brought gains since Oct. 1 to nearly 80%.

But for South Korean regulators, the rally's pace was too fast and too furious, raising red flags about market stability.

As reported by the South Korean news outlet Maeil Business Newspaper, the Korea Exchange's Market Monitoring Committee cited "abnormal price movements" in its Nov. 3 announcement that SK Hynix would be designated an investment warning item, effective on Nov. 4.

The committee said SK Hynix triggered multiple red flags: its share price had climbed more than 200% from a year earlier, and its top 10 trading accounts had exerted outsized influence on trading activity in over four of the past 15 sessions—both thresholds set under local regulatory guidelines.

This is not the first time South Korea's regulators have stepped in this year. In October, Doosan Enerbility Co., Ltd. and Hanwha Ocean Co., Ltd. received similar warnings after abnormal year-to-date rallies.

However, both are much smaller in market capitalization than SK Hynix.

In fact, SK Hynix and Samsung alone now make up 40% of the EWY ETF, exposing investors to high concentration risk. The third-largest holding accounts for just 2.5%.

The regulatory warning triggered sharp losses, with shares of both Samsung and SK Hynix falling 5.5% on Tuesday, dragging the KOSPI index down 2.4% by the close.

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