Market Anticipation of Fed Rate Cut Lifts TSMC Shares

A shift in expectations for U.S. monetary policy provided a tailwind for technology equities this week, with Taiwan Semiconductor Manufacturing Company (TSMC) closing notably higher. The chipmaker's stock gained 1.04 percent on Friday in Taipei, finishing the session at NT$1,460.

The primary catalyst behind the advance was a significant repricing of the likelihood for a Federal Reserve interest rate cut in the coming week. Following the release of weaker-than-expected private sector employment data, traders are now assigning an approximately 87 percent probability to such a move. This changing outlook benefits growth-oriented technology stocks like TSMC, as lower interest rates increase the present value of their future earnings streams. The company stands to gain both as the dominant player in semiconductor fabrication and as a critical supplier for the expanding artificial intelligence sector.

Trading Dynamics Show Late Support

Friday's trading session was marked by volatility. After initially dipping to an intraday low of NT$1,440, TSMC's shares experienced a substantial wave of buying interest just before the market close. More than 4,000 lots, equivalent to four million shares, changed hands in the final minutes of trading. This surge contributed roughly 120 points to the broader Taiex index's recovery for the day. Market observers attributed the buying pressure to institutional investors, noting that the defense of the NT$1,440 level and the close at the session's high point to deliberate accumulation.

Should investors sell immediately? Or is it worth buying TSMC?

Underlying Fundamentals Remain Strong

Beyond the technical and sentiment-driven factors, TSMC's core business narrative continues to show strength. Demand for the company's most advanced chips continues to outpace available supply. Industry reports from Friday suggest TSMC could enforce price increases ranging from 3 to 10 percent for 2026, signaling its sustained pricing power in the market.

The positive sentiment extended across the semiconductor sector. Peer Mediatek saw its shares advance 1.42 percent to NT$1,425, while Hon Hai Precision Industry rose 1.09 percent to NT$231. The ongoing global build-out of AI infrastructure is providing a durable tailwind for the entire industry.

Looking Ahead

All eyes are now on the Federal Reserve's upcoming meeting for definitive guidance. Should the widely anticipated rate cut materialize, it could provide further support for technology valuations. For TSMC specifically, the structural outlook appears unchanged: robust demand, constrained capacity, and healthy margins. The stock's successful hold above the key NT$1,440 level this week reinforces its current technical footing.