TSMC shares are bouncing back hard and Taiwan's whole stock market is rallying as the government steps in to calm investors — good news after a brutal crash last week.

• TSMC jumped another 5% today, clawing back some of the roughly 10% drop since its October record high; analysts say the sell-off was an overreaction to rising costs, not a sign of weaker demand.
• The extra costs come from TSMC ramping up new chip plants in the US and Japan and starting its newest manufacturing process, which temporarily squeezed profit margins before reaching full efficiency.
• Analysts still expect AI-driven demand to keep TSMC's advanced chip factories sold out through 2027, with profits forecast to keep climbing sharply over the next two years.
• Taiwan's broader stock market opened sharply higher and surged more than 5% in a single day, after the government's market-stabilization fund stepped in following last week's record-setting crash.
• That crash was sparked by the US midterm elections, where Democrats took control of Congress, fueling fears of anti-AI regulation and slower data-center spending that hit tech stocks worldwide; separately, Nvidia dipped on news its CEO admitted to an affair tied to a Chinese spying case, and crypto prices fell to two-month lows on fears of tougher US rules.

Outlook: Markets look set to stabilize in the near term as government support and a US tech rebound ease panic, but swings in US tech stocks remain the biggest risk to watch.