Markets are bracing for three major catalysts - the U.S. personal consumption expenditures price index, Nvidia's earnings after the bell on Wednesday and Federal Reserve Chairman Kevin Warsh's remarks at the Jackson Hole symposium Friday.
Nvidia rose 2.2 percent overnight, snapping its longest losing streak since 2022 ahead of the closely watched results.
South Korean stocks swung between gains and losses Wednesday morning as the rebound in U.S. chip shares and falling Treasury yields supported sentiment, while continued foreign selling capped the upside.
The benchmark KOSPI traded at 6,798.08, up 0.82 percent, as of 11:25 a.m.
The index climbed as high as 6,829.88 shortly after the open before falling to 6,704.10 and recovering.
Foreign investors sold a net 416.7 billion won ($301 million) of KOSPI shares. Retail investors bought a net 104.5 billion won, while institutions sold 58.4 billion won.
A total of 401 stocks advanced, 445 declined and 58 were unchanged.
Chip heavyweights edged higher following the overnight rebound in U.S. semiconductor shares.
Samsung Electronics rose 0.39 percent to 258,000 won, while SK hynix gained 0.60 percent to 1,688,000 won.
Other large-cap moves were mixed.
Samsung C&T climbed 3.00 percent and Samsung Life jumped 5.61 percent. Doosan Enerbility rose 4.21 percent and Shinhan Financial gained 1.41 percent.
Hanwha Aerospace dropped 3.90 percent, Samsung Electro-Mechanics fell 3.16 percent and SK Square lost 1.70 percent. Hyundai Motor declined 0.95 percent, LG Energy Solution fell 1.00 percent and Kia slipped 1.48 percent.
The junior KOSDAQ fell 0.96 percent to 819.18 as foreign and institutional selling outweighed retail buying.
Battery-material and semiconductor-equipment shares were among the weaker performers, with EcoPro BM down 2.93 percent, Jusung Engineering off 3.52 percent and Wonik IPS falling 4.01 percent.
The KOSPI's early support followed a broad rebound on Wall Street overnight.
The S&P 500 gained 0.32 percent to 7,677.28, the Nasdaq Composite climbed 0.66 percent to 26,151.30 and the Dow Jones Industrial Average added 0.30 percent to 53,577.40.
Chipmakers led the recovery after several sessions of heavy selling.
Nvidia rose 2.19 percent, snapping a seven-session losing streak. AMD jumped 4.91 percent and Micron Technology gained 2.48 percent, while the Philadelphia Semiconductor Index advanced 1.44 percent.
The MSCI Korea ETF gained 3.75 percent and the MSCI Emerging Markets ETF rose 1.72 percent.
Falling bond yields and oil prices provided additional support.
The U.S. 10-year Treasury yield fell 6.5 basis points to 4.638 percent, while the 30-year yield declined 5.6 basis points to 5.174 percent. Both fell to their lowest levels since early August.
Weaker U.S. consumer confidence contributed to the decline in yields. The Conference Board said its consumer confidence index fell 0.8 point from July to 89.4 in August.
Oil prices also retreated sharply, with West Texas Intermediate crude down 3.12 percent and Brent crude falling 3.89 percent.
The Korean won strengthened slightly to 1,385.20 per dollar from 1,386.10 won in the previous session.
Attention is now turning to Nvidia's second-quarter earnings for another signal on the durability of artificial intelligence chip demand.
The results carry particular weight for South Korea, where Samsung Electronics and SK hynix have become increasingly sensitive to shifts in expectations for global AI spending and memory demand.
Caution was visible elsewhere in Asia.
Japan's Nikkei 225 fell 0.41 percent to 65,586.26, with chip shares among the main drags, while China's Shanghai Composite slipped 0.20 percent to 3,881.74.
The muted trading reflected a market reluctant to make large bets before the next round of U.S. inflation, chip and monetary-policy signals.
AJP Takeaways
• Asian stocks were mostly subdued Aug. 26 as investors waited for U.S. inflation data, Nvidia's earnings and Federal Reserve Chairman Kevin Warsh's Jackson Hole remarks.
• South Korea's KOSPI rose 0.82 percent as Samsung Electronics and SK hynix gained after a rebound in U.S. chip shares, although foreign investors remained net sellers.
• Nvidia's results are expected to provide the next major signal for Asian semiconductor stocks and South Korean chipmakers after recent volatility in AI-related shares.
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