Taiwan stocks break through the "17,000" milestone, with the Federal Reserve's rate cut assistance and Tech Stocks taking the lead.

As US economic data released positive signals, international funds are re-evaluating risk asset allocations. The Taiwan stock market opened today (26th) with a strong momentum, rising 151 points to 27,063, officially stabilizing above the “17,000” new level. Behind this upward trend, multiple factors such as the Fed’s easing expectations heating up, rotation buying in tech stocks, and active capital in small- and mid-cap stocks have jointly contributed, forming a multi-faceted support pattern.

The Fed’s easing expectations as the main driver, accelerating international capital shift

The latest US economic data sent unexpected signals. The November Consumer Confidence Index plummeted to 88.7, the largest drop in seven months, and September retail sales growth was only 0.2% month-over-month, falling short of market expectations. These data reinforce market expectations of an earlier rate cut by the Fed. Meanwhile, White House Economic Advisor Hassett is seen as a strong candidate to become the next Fed Chair. If officially appointed, markets generally anticipate a significant rate cut cycle next year. This expectation pushed the 10-year US Treasury yield below 4%, hitting a one-month low, prompting international funds to accelerate shifting from bonds to risk assets, injecting liquidity into global stock markets.

Tech stocks lead the rally, forming new momentum; Taiwan’s supply chain benefits

Although NVIDIA’s stock price fell nearly 3% due to Google and Meta signing AI chip supply agreements, US healthcare and consumer stocks supported the market, with the five major tech giants all closing in the green. Meta rose 3.78%, Alphabet gained 1.53%, demonstrating the resilience of the tech sector. Taiwan’s related supply chain stocks benefited accordingly, with heavyweight TSMC opening sharply higher by 15 yuan to 1,430 yuan at a high level. Hon Hai and Delta Electronics also strengthened, with the electronic sector’s trading volume share rising back above 70%, becoming the main driving force on the trading floor.

From technical and capital perspectives, Taiwan stocks’ V-shaped reversal pattern is established

On the technical side, the S&P 500 index has risen for three consecutive days, forming a V-shaped reversal pattern, breaking through the key resistance at 6,770 points. If it can hold above the 6,680 support, it may further challenge the high of 6,870. Taiwan stocks follow the international bullish trend, with foreign institutional buying clearly increasing. The New Taiwan dollar has strengthened, and market liquidity remains ample, supporting short-term upward momentum.

Notably, the OTC index opened high and broke through 254 points. What is the OTC index? It is an index composed of stocks listed on the OTC (Over-the-Counter) trading center, representing the overall performance of small- and mid-cap stocks. Today, it broke through a key level, indicating a clear shift of funds into thematic small- and mid-cap stocks, such as AI servers, high-speed transmission, and green energy groups, initiating a new wave of capital rotation.

International market linkage, Taiwan ADR performance diverges

All four major US stock indices closed in the green, with the Dow soaring over 660 points. The Nasdaq and S&P 500 also rose in tandem, while the Philadelphia Semiconductor Index closed slightly higher. Taiwan-related ADRs showed mixed performance: TSMC ADR remained flat, UMC ADR slightly retreated, but Chunghwa Telecom and ASE ADRs rose slightly. Overall, funds still favor growth-oriented tech stocks.

Key points for follow-up and risk warnings

Although market sentiment is optimistic, investors should remain alert to several key variables: whether the Fed’s personnel changes signal clearer rate cut cues, the subsequent US retail data performance, and whether NVIDIA continues to face competitive pressures. If the Fed further confirms a rate cut stance, global stock liquidity will expand further, and Taiwan stocks may challenge previous highs. Conversely, if Taiwan stocks can hold above 26,800 points with moderate volume expansion, it will support the continuation of the mid-term bull pattern.

Driven by tech stocks, policy support, and active OTC indices, Taiwan stocks have begun a new wave of gains. Investors can continue to follow capital rotation trends, focusing on mainstream themes such as AI, electric vehicles, and green energy, while closely monitoring Fed movements and international economic data to seize year-end profit-taking opportunities.