Taiwan's stock market is under heavy pressure and could fall toward the 40,000 point level, which is bad news for investors after a brutal few weeks.

• Taiwan stocks were closed for four days and now face a wave of catch-up selling, with foreign investors having dumped a record amount of shares right before the break.
• Chip stocks swung wildly in the US during the closure, and worries about AI spending, oil prices, and inflation are adding to the pressure.
• Whether the sell-off turns into a deeper slide depends largely on whether foreign investors keep dumping shares and whether TSMC can stabilize.
• Big AI-linked names have already been hit hard: TSMC fell after its earnings call, a memory chip maker dropped sharply, and MediaTek sank on fears that Google will delay chip orders.
• This week brings a packed slate of earnings calls from major Taiwan tech firms plus a Fed meeting and US growth data, any of which could move the market sharply.

Outlook: If US tech stocks stabilize and TSMC holds its ground, this is likely just a short, sharp dip; if not, the index could keep sliding toward the 40,000 mark.