Taiwan's stock market dropped sharply, hurt by rising US government bond yields and oil nearing $100 a barrel — bad news for chip investors, though some memory and optical stocks held up.

• The main index briefly fell more than 600 points and lost the 47,000 level before closing down about 240 points on thin trading.
• TSMC slipped and Delta Electronics fell hard on reports of a capacitor problem in some power chargers, even after record August sales.
• The trigger came from outside Taiwan: US long-term bond yields jumped to 4.85% and oil spiked as US and Iranian forces traded strikes in the Gulf.
• Money rotated into memory and optical-fiber names — ASE, Phison, and fiber suppliers rose after word of a big Corning order from a US telecom.
• Gold has slipped for three sessions as traders bet the Fed may raise rates instead of cutting.

Outlook: The Fed's rate decision next week is the swing factor — no hike could push Taiwan stocks back toward their 48,218 high, while a hike likely sends them retesting 45,000.