Taiwan's stock market is under renewed pressure as technical signals suggest big investors have already started pulling money out ahead of US midterm elections.

• Taiwan stocks, the US S&P 500, and TSMC's US-listed shares have all broken below their prior highs' weekly lows, a sign that buying momentum is fading and money may be leaving early.
• The Philadelphia Semiconductor Index is showing lower highs and lower lows, meaning chip stocks are technically weakening — bad news for Taiwan, whose market is heavily tied to semiconductors.
• Some AI companies are generating less free cash than expected, raising doubts about whether massive AI spending will actually pay off, which could cool investor enthusiasm for AI-related stocks.
• The VIX fear gauge is still below 20, so markets aren't in full panic mode yet, but history shows US midterm elections can bring sharp short-term drops even if stocks typically rise over the following months — in 2018, stocks fell nearly 20% in just one month after the midterms.
• US tech stocks already sold off hard on weak earnings from Intel and Amazon, dragging the Nasdaq and chip stocks down sharply, and Taiwan's market saw its worst single-day point drop in years, falling below its six-month average price line.

Outlook: Analysts expect continued choppy, high-level trading in the near term, with some seeing the recent sharp drop as a healthy reset that could support a stronger rebound later.