South Korean stocks rallied on Monday, led by technology shares, as a halt in Middle East hostilities lifted investor sentiment.

The U.S. and Iran paused strikes in recent days, raising hopes of another possible ceasefire and pushing Brent and West Texas Intermediate (WTI) crude prices down nearly 5% after last week's rally. Meanwhile, the U.S. 10-year Treasury yield remained near 4.7% ahead of the Federal Reserve's interest rate decision on Wednesday.

The Korea Composite Stock Price Index, or Kospi, increased by 65.13 points, or nearly 1%, to end at 6,755.75. The Kosdaq also rose by 16.64 points, or 2.2%, to close at 764.86.

In corporate news, Samsung Electronics (KRX:005930) signed a memorandum of understanding with U.S.-based semiconductor and infrastructure software firm Broadcom worth $200 billion, the South Korean chipmaker said in a press release on Saturday.

The agreement is expected to broaden their partnership in memory and foundry operations to support next-generation AI infrastructure.

Shares of Samsung Electronics added nearly 2% at market close.

In other news, SK Group, the parent of SK Hynix (KRX:000660), signed a memorandum of understanding with U.S.-based chipmaker Nvidia to secure and co-develop next-generation AI memory, Nvidia said in a press release on Friday.

The two companies will jointly develop and optimize next-generation AI memory, including high-bandwidth memory (HBM), for AI infrastructure spanning large language models, agentic AI and physical AI, according to the release.

Shares of SK Hynix increased more than 3% at market close.

Additionally, Naver (KRX:035420), Nvidia, and private-equity firm Brookfield proposed expanding South Korea's sovereign AI factory infrastructure by increasing the planned Nvidia DSX AI factory deployment to 200 megawatts from the 55-megawatt project announced in June, Nvidia said in a press release on Friday.

The expanded facility will be built at Naver's GAK Sejong hyperscale data center in South Korea's Sejong. Nvidia plans to invest $1 billion in Naver, while Brookfield signed a non-binding term sheet to provide up to $9 billion in funding, with Naver financing the balance.

Shares of Naver jumped nearly 9% at market close.