Volatility in the U.S. stock market continues as Trump once again criticizes China, stating it has "totally violated the tariff agreement made with the United States." This reignites worries of an escalation in the U.S.-China trade war, compounded by poor performance of semiconductor stocks, leading the Philadelphia Semiconductor Index to tumble by 102 points, or 2.11%. While the S&P 500 index showed slight fluctuations that day, it still managed to rise by 1.87% over the week and achieved a monthly gain of over 6%, marking the largest monthly increase since November 2023.

Trump's comments have triggered significant market turbulence, with U.S. Treasury Secretary Yellen revealing that Trump may need to personally communicate with Xi Jinping to resolve tensions, as negotiations between the two countries remain stalled with increasing confrontations. The Chinese embassy in the U.S. has also retaliated by accusing the U.S. of improperly applying export controls on the semiconductor sector, leading to renewed friction between the two nations and further undermining market confidence in tech stocks.

For the Taiwanese market, in light of the Dragon Boat Festival holiday, the Taiex index futures saw a significant drop of 257 points, and TSMC futures fell by 6 NTD. Despite retail investors increasing their participation, seeing a net increase of 900 million NTD in margin financing, the risk of further declines in Taiwanese stocks after the holiday cannot be ignored.

On the chip market front, foreign investors sold a significant 20.67 billion NTD on Friday, with all three major legal persons collectively selling 6.77 billion NTD, highlighting their caution towards the risks posed by the escalating trade war. The weighted index closed Thursday at 21,347.30 points, down 10.42 points, or 0.05%, with a total transaction value reaching 455.5 billion NTD.

Looking at the performance of the four major U.S. indexes, the Dow Jones increased by 54 points on Friday, while the S&P 500 and Nasdaq saw slight declines, especially the semiconductor index faced steep losses, which will inevitably impact the performance of electronic blue-chip stocks in Taiwan, making TSMC's opening trend a key indicator.

Additionally, the U.S. Federal Trade Court ruled on Wednesday that Trump must immediately halt most import tariffs, generating expectations in the market of a potential easing of trade tensions. The next hearing is set for June 5, which will add a new variable to policy direction during this interval.

On the economic front, there's a glimmer of hope as the PCE price index for April increased by 2.1% year-over-year, marking the lowest level since February 2021. The core PCE also decreased to 2.5%, cooling inflation data and providing the Federal Reserve some room for future rate cuts, although the market's focus remains on geopolitical risks and trade conflicts.

Investors should prioritize risk management in the short term, avoiding chasing high prices in electronic stocks while keeping an eye on the performance of key stocks like TSMC, MediaTek, and Etron Technology, coupled with monitoring changes in futures and margin financing dynamics. In the medium to long term, they may consider stocks benefiting from domestic consumption, raw materials, and those with low-base scenarios, awaiting a period of stability in the index before positioning in mainstream themes.