The Taiwan stock market has rebounded nearly 3000 points following the crash in April. With signs of positive development in US-China negotiations, the S&P500 has risen for nine consecutive days, and TSMC's ADR increased by 3.8%. Last week, the Taiwan stock market surpassed the 20,000-point mark again. According to investment institutions, after the April crash, the market's rebound attempts to fill the gap created by the tariff crash, but the trading volume has clearly shrunk. The short-term rebound is expected to continue, although caution is needed regarding upward pressure.

Driven by a strong performance in the US market, the Taiwan stock index surged by 552.61 points last week, an increase of 2.73%, bringing the index to 20,787.64 points. The weekly performance showed two consecutive positive closes, totaling a rise of 914.91 points with a weekly increase of 4.6%, although the average daily trading volume was only 273.7 billion NTD. Du Xinpei, a fund manager at PGIM, noted that after a 3000-point crash in April, the short-term market is consolidating. There are signs of a slight easing in the trade war atmosphere as both sides may be dialing back on tariff increases.

Foreign investment data shows that in April, foreign investors sold off 614.2 billion NTD worth of Taiwan stocks, maintaining their trend of significant reductions. Although foreign investors have been buying back Taiwan stocks for two consecutive weeks, it remains to be seen whether this momentum can continue. Moreover, the rapid declines have led to a substantial washout of leveraged funds, resulting in a financing balance of 209.7 billion NTD that has receded to levels seen at the end of 2023.

Despite the ongoing uncertainty in investment sentiment, reports from international cloud giants have boosted confidence in the supply chain. For instance, Meta has increased its capital expenses for 2025 to between 64 billion and 72 billion USD, while Microsoft is expected to report favorable Q3 results on April 30, with revenues projected to reach 70.07 billion USD, a year-on-year increase of 13%. All of these factors contribute to restoring investment confidence in Taiwan's tech stocks. In terms of stock selection, Du Xinpei suggests focusing on deeply discounted thematic stocks for short-term rebounds and keeping an eye on leading semiconductor companies in the 2nm supply chain, edge computing, memory, optical communication, low-orbit satellites, robotics, and foldable smartphones. Traditional sectors are also recommended for long-term holding, including those benefiting from MAGA policies, such as aerospace, heavy electricity, industrial automation, biotech, and finance.