Taiwan Index Futures Night Session Plunges and Wipes Out 3,006 Points—Worst Ever: A 2,000-Point Crash in Two Minutes; Come Monday, “Four Creditors in One Room”—Everyone’s Just Waiting for the Next Blow

Taiwan Futures Night Session Crashes 3,006 Points in the Early Morning of the 6th (-6.65%), Closing at 42,220 Points, Breaking the Record for Largest Single-Day Drop in History, with Mini Taiwan Futures Hitting the Limit Down and Plunging 4,522 Points. TSMC Futures Simultaneously Dropped 145 Points, Closing at 2,225 Points. U.S. Stocks on Friday Plunged Due to May Non-Farm Employment Data Surpassing Expectations, Triggering Rate Hike Panic, with the Philadelphia Semiconductor Index Dropping Over 10% in a Single Day. Taiwan Futures Market Bears the Brunt, with Margin Debt Remaining High at 570 Billion Yuan and Multiple Leverage from the "Four Loans Simultaneously," Expecting an Epic Opening in the Spot Market on Monday.
(Background: Bitcoin Breaks Below $60k! Over $1.5 Billion Liquidated Across the Network in 24 Hours, Non-Farm Data Wipes Out Global Markets)
(Additional Context: Dark Week for Asian Markets! Korea Locks Down Margin Accounts, Taiwan’s Frogs Wail, Japan’s NISA Investors Suffer from Stock Market Crash)

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• U.S. Stocks’ Five-Day Drop Catalyst
• "Four Loans Simultaneously" with 570 Billion Yuan Margin
• Horror Waiting for Monday

The last time Taiwan stock futures experienced a single-day largest decline was on April 7, 2025, when Trump announced reciprocal tariffs, triggering global panic, and the Taiwan stock market plummeted 2,065.87 points that day. The record lasted for 14 months, but this Friday night (6th), the market plunged by 3,006 points in one go, directly rewriting history.

Image Source: Yahoo Finance

Even more astonishing is the volatility during the session, with over 2,000 points of sharp fluctuation within just two minutes. Mini Taiwan Futures even hit the limit down at one point, dropping 4,522 points, a 10% decline.

U.S. Stocks’ Five-Day Drop Catalyst

The trigger was the U.S. May Non-Farm Employment Report. New jobs added: 172k, nearly double the market expectation of 85k. Unemployment rate: 4.3%, with hourly wages increasing by 3.4% annually. Once the data was released, CME rate hike probability surged from 48% to over 60%, with the 10-year U.S. Treasury yield soaring above 4.5%, and the 30-year breaking 5%.

U.S. stocks collapsed across the board on Friday (the 5th). The Philadelphia Semiconductor Index plunged 1,396 points (-10.26%), marking the largest drop since March 2020’s COVID-19 outbreak. The Nasdaq fell 1,121 points (-4.18%), the S&P 500 dropped 200 points (-2.64%), and the Dow Jones declined 695 points (-1.35%).

AI concept stocks, which surged after Computex, became the biggest casualties: Broadcom fell a total of 20% over two days, Micron dropped 13.21% in one day, ARM down 12.84%, TSMC ADR down 6.68%, and NVIDIA down 6.20%, collectively wiping out over $300 billion in market value in a single day.

Taiwan stock futures opened with a gap down during the night session, followed by continuous selling pressure. TSMC futures closed at 2,225 points, down 145 points (-6.12%), reflecting heavy sell-offs in the semiconductor sector.

"Four Loans Simultaneously" with 570 Billion Yuan Margin

Taiwanese investors have significantly increased leverage over the past two years amid the AI rally, forming what the market calls the "Four Loans Simultaneously" phenomenon: mortgage, mortgage refinancing, personal loans, car loans, credit card installment plans, and stock margin financing, all stacked together chasing high-tech stocks.

Currently, margin debt stands at 570 billion yuan, and foreign institutional futures short positions have exceeded 69k contracts, reaching a record high. The bullish and bearish forces are extremely skewed, and retail investors heavily holding long positions are most vulnerable in such a severe decline.

If the spot market drops close to the futures night session’s level at Monday’s open, margin calls could trigger widespread forced liquidations. Once "Four Loans Simultaneously" investors are forced to sell at a loss, it could trigger a chain reaction of forced liquidations, further amplifying the decline.

Horror Waiting for Monday

Based on the night session closing at 42,220 points, the market would have dropped from Friday’s close of 45,070 points directly to around 42,000 points, implying a decline of about 3,000 points. If this materializes, it will easily break the 2025 April 7th record of a 2,065-point single-day decline in the spot market.

However, analysts warn that "sharp declines often lead to sharp rebounds," a common script in past market crashes. Trading advice is to wait for three signals before considering entering: full panic liquidation, a large-volume long lower shadow during trading, and a significant decrease in margin debt.

The above is not investment advice.