4k external monitor shows 3840x2160 and 1920x1080 but not 2560x1440

The optimum scaling for that size display on MacOS is 1920 x 1080 (HiDPI), which will give the "Retina display" HiDPI effect, making the display objects appear at 'normal' size, but using the doubled pixel density to create a higher-resolution image.

(Another way to look at it is that the display is actually at 3840 x 2160, but the OS magnifies everything x2, to avoid the tiny sizes that you have seen.)

Any scaling size with (HiDPI) after it will use Retina scaling to some degree.

MacOS will display a larger range of Scaling options if you hold down Alt and click on the "Scaled" button in System Preferences > Displays.

I guess that was an issue of the previous versions of MacOS, because MacOS Catalina allows 1920x1080, 2304x1296, 2560x1440, 3008x1692, 3200x1800, 3360x1890 scaled modes on 27" 4K external monitor.