Why Taiwan Semiconductor Manufacturing Stock Is Jumping Today

Taiwan Semiconductor Manufacturing (NYSE: TSM) stock is moving higher Tuesday. The semiconductor fabrication leader's share price was up 4.7% as of 3:15 p.m. ET. At the same point in the day, the S&P 500 (SNPINDEX: ^GSPC) was up 1.2%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) was up 1.5%.

TSMC is gaining ground today following macroeconomic and geopolitical developments that are helping to push valuations for tech stocks higher. The company's valuation is also getting a boost from a new market-share report.

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TSMC stock rises as investors seen macroeconomic and geopolitical green flags

Following gains yesterday, tech stocks are continuing to rally today on indications that the Federal Reserve serving up an interest rate cut at its meeting next month is now a realistic possibility. Fed Chair Jerome Powell said this morning that the central banking authority would continue to monitor inflation trends and the impact of tariffs, but he seemingly left the door open for a July rate cut. Meanwhile, recent comments from other Fed officials have directly advocated for the move.

TSMC stock is also rising thanks to news that Israel and Iran have agreed to a ceasefire. The market has been weighing geopolitical risk factors lately, and the possibility that the war between Israel and Iran could spiral into a wider conflict involving the U.S., Russia, and China has been a concern that's tamped down on buying action despite some other bullish market indicators. With signs that near-term risk on that front may be moderating, investors are buying TSMC shares today.

TSMC retains its leadership in the foundry industry

Earlier today, Counterpoint Research published a new market-share report on the semiconductor industry. In the Foundry 2.0 category, which includes both fabrication and nonfabrication products and services, TSMC continues to enjoy a strong leadership position.

According to Counterpoint, TSMC claimed a 35% market share in the Foundry 2.0 category in this year's first quarter. The performance was in line with the company's market share in the previous quarter and represented a 0.9% increase compared to Q1 2024. The report bodes well for TSMC continuing to maintain a decisive lead over its competitors in the contract chip manufacturing space.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.