SP500 4% Down, Intel Stock Plunges 20% on TSMC Deal Rumours

Intel’s Rally Reverses Amid TSMC’s Massive Investment

The Intel stock saw a massive rally of 40% in February after rumours of the Taiwan Semiconductor Manufacturing Co. (TSMC) trying to take over Intel. But, yesterday we heard that they will invest $100 billion in broader U.S. chip production over the next four years, but not news about taking over Intel.

Initially, Intel (INTC) surged 5% at market open yesterday, fueled by optimism that Nvidia and Broadcom were testing its production process. Successful trials could lead to major chip manufacturing contracts, providing a much-needed boost to Intel’s struggling chip division, which posted a big loss in 2024.

However, the rally was short-lived. Intel’s stock quickly reversed on the TSMC news and the upcoming tariffs, erasing pre-market gains and ending the day down 5% as overall market sentiment turned bearish. Today, the former Intel directors sought an Intel fabs separation and fiercely opposed the TSMC acquisition. According to them, it would be wiser to establish a new American foundry. As a result, the decline accelerated with another 5% drop today, bringing Intel’s total losses to 20% in just two days, worsening its technical outlook.

Market Outlook

With Intel in freefall and risk sentiment deteriorating, market conditions remain fragile. If Intel fails to stabilize at key support levels, further downside could follow. Meanwhile, the S&P 500’s decline suggests broader uncertainty, with investors watching bond markets and key technical levels for signs of a potential rebound.