The benchmark KOSPI ended 0.6 percent higher at 5,683.8 after swinging between 5,421.72 and 5,828.13. The junior KOSDAQ gained 1.5 percent to close at 714.95.
The won weakened by 0.5 won to close at 1,341.5 per dollar, little changed after surrendering earlier gains. The three-year government bond yield fell 3.3 basis points to 3.968 percent.
The volatility came as Democrats secured control of both chambers of Congress, ending unified Republican control. Trump acknowledged the election results and said he was prepared to work with Democrats.
Divided government could block additional tax cuts or spending measures without necessarily easing the structural pressures on U.S. borrowing costs. The absence of a clear plan to address federal deficits and debt could keep long-term Treasury yields elevated.
Any decline in U.S. yields could offer some relief to the Bank of Korea (BOK), although domestic inflation would remain a separate constraint. The central bank held its base rate at 3.00 percent in October, with its next policy meeting scheduled for Nov. 26.
For Korean equities, the more immediate concern is the outlook for American AI infrastructure investment.
The rapid expansion of data centers has supported strong demand for high-bandwidth memory and server DRAM supplied by Samsung Electronics and SK hynix. Political resistance to the facilities’ electricity and water consumption, however, could slow future construction.
Bloomberg Economics chief economist Tom Orlik told a Korea Financial Investment Association webinar Wednesday that state governors could influence the pace of development even if Democratic control of Congress did not produce new federal AI legislation.
In Texas, Democrat Gina Hinojosa defeated Republican incumbent Gov. Greg Abbott after calling for a temporary moratorium on new data center development. Georgia’s incoming Democratic governor, Keisha Lance Bottoms, also campaigned for a construction pause, while Ohio communities voted on local measures affecting such projects.
Restrictions would not necessarily disrupt chip orders already in the pipeline, but could weigh on expectations for future demand and profitability.
Hyosung Kwon, an economist at Bloomberg Economics, said developers could move projects to states with less stringent rules, limiting the impact on overall semiconductor demand.
Texas hosts Project Star, a gas-fired power development in Encinal designed to supply electricity to nearby AI data centers. Its estimated total cost is $22.3 billion, with initial commercial operations targeted for 2029.
Alaska presents a separate challenge through the proposed LNG development that Washington has promoted as a destination for Korean investment. Seoul has yet to make a final commitment, pending assessments of commercial viability and legal requirements.
Both Republican incumbent Sen. Dan Sullivan and Democratic challenger Mary Peltola support the project. For Korea, its financing and implementation terms therefore remain a more immediate concern than the outcome of the race itself.
Congressional scrutiny could introduce another complication for Korean companies operating under bilateral investment agreements.
“A lot of those deals would be subject to some fairly significant scrutiny from Congress,” Orlik said, referring to substantial U.S. investment commitments made by Korean companies under the Trump administration.
The longer-term AI outlook remains more balanced than the day’s market swings might suggest. A sharp U.S. equity correction coupled with a prolonged pause in data center spending could severely affect Korean chipmakers. Under Bloomberg Economics’ baseline scenario, however, AI capital investment is expected to continue.
For Korean investors, the election adds political uncertainty to an outlook already shaped by AI spending and high U.S. borrowing costs. The next test will be how campaign promises translate into state regulations, congressional scrutiny and actual investment decisions.
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