Asian Stocks Plunge as South Korea Falls More Than 3.5% and Nikkei Drops Nearly 1,600 Points

South Korean shares led a sharp sell-off across Asian markets on Monday, falling more than 3.5% before recovering part of the loss. Japan’s Nikkei also came under heavy pressure, dropping nearly 1,600 points during the session.

The declines followed a weak close on Wall Street on Friday. The Philadelphia Semiconductor Index fell 3.47%, while the S&P 500 dropped 0.25% and the Nasdaq Composite lost 0.52%. The Dow Jones Industrial Average slipped 9.45 points, or 0.02%. Taiwan Semiconductor Manufacturing Co. American depositary receipts fell $9.78, or 2.29%, to $417.52.

Investors turned cautious after U.S. Federal Reserve Chair Kevin Warsh reiterated the central bank’s emphasis on fighting inflation, increasing concern about the possibility of higher interest rates.

South Korea’s benchmark opened down 175.31 points, or 2.58%, at 6,613.58. It later reached 6,547.76, a decline of 3.55%, as SK hynix and Samsung Electronics both fell more than 3%. Buying emerged after the steep drop, and the index stood at 6,680.58, down 1.6%, at 8:24 a.m. Taipei time.

The Nikkei opened at 65,668, down 737 points, or 1.1%. It later fell 1,573 points, or 2.36%, to 64,832 before standing at 65,211, down 1,194 points, at the same time.