TAIPEI (Taiwan News) — Taiwan's stock market fell Tuesday (Sept. 10), influenced by the waning impact of Apple's new iPhone 16 and concerns about a potential US economic recession.

Fan Chen-hung (范振鴻), head of Capital Investment Management Corporation, warned that the AI hype that swept through global investment markets over the past year has cooled down. He noted that US investors now believe AI investments are temporarily difficult to monetize, with Nvidia's stock price falling by more than 20% from its peak, per CNA.

The Taiwan stock market is heavily weighted toward technology stocks. Fan observed that these companies are highly correlated with the AI and semiconductor sectors and may follow suit.

Cathay Securities Investment Trust Chair Chang Hsi (張錫) believes that increasing uncertainty about the upcoming US presidential election is causing its stock market to consolidate. Based on historical experience, Chang expects the US stock market to rally after the election.

The recent downturn in the US stock market is largely attributed to growing concerns about a potential economic recession. The US ISM manufacturing index contracted for the fifth consecutive month in August. 

Job growth has also slowed. The US non-farm payroll increase of 142,000 in August was lower than expected.

While current data suggests a cooling economy rather than a recession, research institutions' predictive models indicate a potential recession in the near future, Fan said. This uncertainty has made investors more cautious.