Rumors of Trump nominating a hawk for Fed Chair cause TSMC ADR to fall, sparking concerns for the Taiwan stock market

Summary

Rumors about President Trump potentially nominating the hawkish Kevin Warsh as the next Federal Reserve Chairman have roiled markets. Concerns over a slower pace of interest rate cuts and a resulting stronger dollar triggered a 2.65% drop in TSMC’s ADR and a nearly 4% decline in the Philadelphia Semiconductor Index. This has led to widespread expectations of significant downward pressure on the Taiwanese stock market, especially its technology sector.

Impact Analysis

So this is the market getting spooked by political noise. The rumor about a hawkish Fed chair like Warsh is a direct threat to the ‘lower rates fuel tech growth’ narrative, so of course, TSMC gets hit. A 2.65% ADR drop on a rumor shows how nervous the street is about any change in the Fed’s stance.[citation:1, citation:39] But this is a macro headwind, not a TSMC problem. Their fundamental story around AI leadership hasn’t changed, and their 2025 performance was strong.

This feels like an overreaction. The short-term charts are ugly, showing a downtrend with a MACD death cross. However, the long-term trend remains positive. For a long-term holder, this is exactly the kind of macro-driven dip you want to see in a quality name. I’d view this as a window to start accumulating, betting the fundamental story wins out over political rumors.