KOSPI Drops Below 5,000 in Coordinated “Warsh Shock” The Korea Composite Stock Price Index fell beneath the 5,000‑point mark on February 3, 2026, after a sudden “Warsh shock” triggered a rapid sell‑off across Seoul’s equity market. Multiple dailies—including Kyunghyang Shinmun, Kookmin Ilbo, Donga Ilbo, Hankyoreh, Maeil Business Newspaper and Korea Economic Daily—reported the plunge as a single, coordinated market event[1]. The drop represented a more than five‑percent slide, echoing broader global market weakness tied to recent U.S. monetary policy signals[1].

Federal Reserve Leadership Decision Amplifies Global Sell‑Off The Korea Herald linked the KOSPI decline to a Federal Reserve leadership decision that rattled investors worldwide, suggesting the “Warsh shock” was amplified by concerns over tighter U.S. monetary policy[1]. Analysts noted that the Fed’s stance heightened risk aversion, prompting rapid capital outflows from emerging markets, including South Korea[1]. The combined effect of domestic shock and international policy uncertainty drove the index’s steep fall[1].

Democratic Party Faces Internal Conflict Over Merger Proposal Seoul Shinmun highlighted a sharp division within the Democratic Party (DP) on February 3, with members debating a proposed merger framed as an “insurrection versus insult” issue[1]. Segye Times added that party leader Jung Chung‑rae’s stance placed the merger in a “black hole,” reflecting deep‑seated factional tensions[1]. The intra‑party dispute unfolded concurrently with the market turmoil, underscoring political instability amid economic stress[1].

Real Estate Investor Lee Concentrates Capital While Legislation Stalls Chosun Ilbo reported that a figure identified only as Lee is allocating all available resources to real‑estate investments, raising concerns about speculative activity[1]. At the same time, parliament remains inactive on related housing legislation, suggesting policy inertia despite market pressures[1]. Additional reports noted that newly built public housing units have remained vacant for a year, questioning the effectiveness of recent housing initiatives[1].