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South Korean stocks extended their winning streak for a third week as optimism over fresh US trade talks sent hundreds of millions in foreign cash back into the market.

What does this mean?

Growing hopes for a breakthrough in US-South Korea trade negotiations pushed the KOSPI index to a record intraday high this week, ending up 3.8%. Foreign investors snapped up over 443 billion won (about $312 million) in Korean shares, marking a sharp sentiment shift after a quiet stretch. Meetings in Washington between South Korean officials and the US Commerce Secretary revived expectations that trade progress could influence everything from the won to global investment flows, according to analysts at Mirae Asset Securities. Still, beneath the headline rally, caution lingered - more stocks fell than rose, with the biggest gains clustering around heavyweight exporters like Samsung Electronics, SK Hynix, Hyundai Motor, Kia, and POSCO Holdings.

Korea's rally signals renewed interest from global investors, but the gains are far from broad-based. Most of the new cash is heading into large exporters and blue chips seen as direct winners from better US trade terms. Meanwhile, lagging breadth and cautious currency and bond moves - the won slipped slightly to 1,421.2 per dollar and short-term bond yields softened - show that plenty of investors are still wary of policy risks ahead.

The bigger picture: Global capital flows hinge on trade diplomacy.

Progress in South Korea-US trade talks could reshape much more than local stock prices. Deals here could change where money moves globally, helping Korea weather international ups and downs caused by moves in the US and China. With so many countries watching for the next phase of global trade rules, these negotiations offer a real-time signal for businesses, investors, and governments worldwide.