The stock of Taiwan Semiconductor Manufacturing (NYSE: TSM) is seeing a substantial sell-off Monday in response to multiple bearish catalysts. The company's share price was down 2.7% as of 2:45 p.m. ET today amid the trading backdrop of a 3.1% decline for the S&P 500 index.
TSMC stock is heading lower in conjunction with bearish momentum for the broader market today after President Donald Trump ramped up his criticism of Federal Reserve Chairman Jerome Powell. Unfolding developments in the trade war and the tech race between the U.S. and China are also pressuring the company's valuation.
TSMC stock slumps as Trump takes aim at the Fed
Stocks are broadly heading lower today, and recent comments from President Trump about the Federal Reserve and Powell are playing a substantial role in the sell-off. In comments this morning, Trump called Powell a "major loser" and said that the Fed should lower interest rates immediately to prevent the U.S. economy from slowing. Investors are having a negative reaction to the possibility that the Trump administration will try to fire Powell before his term as Fed chair concludes in 2026.
TSMC comments on Huawei and AI in China
In the annual report that it published last week, TSMC said that it has limited visibility when it comes to semiconductors that it manufactures eventually being used by Chinese customers. The U.S. has opened a probe into chips produced by TSMC being used in Huawei's technologies, and it's trying to get the semiconductor foundry leader to take more responsibility for where its advanced artificial intelligence (AI) and telecommunications chips wind up.
In addition to export bans preventing some high-end AI chips and semiconductor manufacturing equipment from being sold to China, the U.S. specifically prevents technologies from being sold to Huawei.
As the world's leading contract chip manufacturer, TSMC is at the heart of the technological and broader geopolitical competition between the U.S. and China. So while the company looks poised to benefit from strong demand for chip fabrication services, unfavorable regulatory and national security dynamics are large risk factors for the stock.
Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?
Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Taiwan Semiconductor Manufacturing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $524,747!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $622,041!*
Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 153% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of April 21, 2025
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
