WS #12888

The dominant signal in this window is the escalation of the Japan earthquake narrative, with a new M5.6 aftershock and confirmation that TSMC evacuated workers at its Kumamoto factory. This directly threatens semiconductor supply chains and exacerbates the ongoing tech selloff. The tsunami threat has passed, but the risk of production disruption at TSMC's critical facility remains high, adding to bearish pressure on chip stocks. Separately, Taiwan prosecutors detained an Nvidia employee over alleged AI chip smuggling to China, and China's Aishengna is producing domestic immersion-DUV lithography machines, though sources say they remain far from matching ASML models. These developments reinforce the bearish thesis for semiconductor equipment makers and Nvidia. On the macro front, the US-Iran de-escalation narrative continues, with oil prices falling to a one-week low as talks progress, though Strait of Hormuz flows remain subdued. The Fed begins its two-day meeting with markets pricing a pause. The tech selloff narrative is ESCALATING with new negative catalysts from Japan and Taiwan. The Japan earthquake narrative is STABLE with aftershocks but no new major damage reports. The US-Iran de-escalation narrative is STABLE with continued diplomatic progress.