Griffin’s Move Offers AI Reprieve as Traders Eye More Blowouts

Billionaire Ken Griffin's rescue of hedge fund Situational Awareness triggered a relief rally in global AI stocks, with South Korea's Kospi Index surging a record 18% and the Philadelphia Semiconductor Index climbing the most since April 2025. The forced liquidation of Situational Awareness's AI investments, which included SK Hynix Inc., has left traders debating whether the worst is over or more blowouts are on the way, drawing comparisons to the 1998 collapse of Long-Term Capital Management and the 2008 financial crisis.

Bloomberg -- Billionaire Ken Griffin's rescue of hedge fund Situational Awareness helped trigger a relief rally in global AI stocks, leaving traders debating if the worst is over or more blowouts are on the way. Most Read from Bloomberg - Singapore's Gated Island for the Rich Is Marred by Decayed Homes https://www.bloomberg.com/news/features/2026-07-30/singapore-s-sentosa-cove-island-slides-from-monte-carlo-dream-to-decaying-homes?utm campaign=bn&utm medium=distro&utm source=yahooUS - Chip Stocks Post Biggest Advance Since April 2025: Markets Wrap https://www.bloomberg.com/news/articles/2026-07-29/stock-market-today-dow-s-p-live-updates?utm campaign=bn&utm medium=distro&utm source=yahooUS - US Strikes Iran Again as Conflict Spreads Across Middle East https://www.bloomberg.com/news/articles/2026-07-30/us-launches-fresh-strikes-against-iran-as-war-escalates-again?utm campaign=bn&utm medium=distro&utm source=yahooUS - Microsoft's $450 Billion Jump Is Biggest in Stock Market History https://www.bloomberg.com/news/articles/2026-07-30/microsoft-eyes-history-with-490-billion-pop-in-market-value?utm campaign=bn&utm medium=distro&utm source=yahooUS South Korea's Kospi Index, with its two global chip giants, surged a record 18% following a three-day selloff. Its Taiwanese peer rose 8%, while Japan's Nikkei 225 also climbed by 4%. On Thursday, a closely-watched US gauge of semiconductor giants climbed the most since April 2025. For some market participants, Situational Awareness's forced liquidation of its AI investments helps explain the pressure in July, where one wave of selling would ricochet around the world and spiral into another wave. Margin loans had hit record highs in South Korea last month, before retail traders slashed borrowings. "They are done. Gone. Liquidated," said Calvin Yeoh, who helps manage the Merlion Fund at Blue Edge Advisors, referring to Leopold Aschenbrenner's hedge fund. "Meanwhile in Korea, all the retail guys got blown out, and no more sellers there." The Philadelphia Semiconductor Index is down more than 20% for the month, the worst performance since the global financial crisis. The Kospi is also poised to end the month 22% lower, dragged down by SK Hynix Inc. and Samsung Electronics Co., the very same stocks that had driven it to become the world's best-performing market earlier in the year. Situational Awareness had counted SK Hynix, whose American Depositary Receipts had at one stage plunged below its sale price, in its portfolio. LTCM and 2008 Yeoh isn't the only one who sees a reprieve in the selling, though what happened has left investors wondering if there are others in a similar plight. Comparisons on trading desks were made to the 1998 collapse of Long-Term Capital Management, which had spurred the Federal Reserve to organize a rescue for the systemic risks to financial markets. Others recalled the banks and funds that were bought out one after the other in the global financial crisis. "If there is one Situational Awareness, how many of them are out there?" said Cusson Leung, chief investment officer of international wealth management at KGI. "I was reminded this morning of a very similar scenario, that was exactly when JPMorgan bought Bear Stearns in 2008," where there was relief in the market before the collapse of Lehman Brothers, he said.