The technology selloff deepened even after TSMC reported record profits, according to Reuters. The world's largest contract chipmaker posted its strongest earnings on record. Investors sold anyway. The result did nothing to steady a market that has spent recent sessions moving lower across the tech sector.

The detail matters more than the headline. TSMC sits at the base of the semiconductor supply chain. It manufactures chips for the largest names in smartphones, computing and artificial intelligence hardware. When the sector's most important supplier delivers record profit and the market still falls, the selling is not about earnings quality.

Why didn't record profits stop the selloff?

The mechanism is straightforward. Markets price expectations, not results. A record quarter that matches or falls short of what analysts already priced in gives investors no reason to buy. Profit-taking then compounds. Traders who rode the sector's earlier gains lock in returns, and their selling pushes prices lower, which triggers further caution elsewhere.

The mood, in Reuters's phrasing, stayed dark. Even the strongest possible earnings signal from the chip industry's core company "can't lift the mood." That is the story: sentiment, not fundamentals, is driving prices right now.

What does this change for investors?

It changes the weight of evidence they should watch. Earnings reports have lost near-term power to move prices upward. If record profit at TSMC cannot rally the sector, investors will look elsewhere for direction: interest-rate expectations, order forecasts, and capital-spending guidance from the big chip buyers.

For semiconductor shareholders, the practical question is patience. The underlying business, judged by TSMC's numbers, remains at record strength. The market's verdict on that business, this week at least, has been the opposite.

What comes next?

Watch the next round of sector earnings and any commentary from TSMC on future demand. Analysts will also track whether the selloff narrows to high-valuation names or keeps spreading across the wider technology complex. Until sentiment turns, even record results may keep landing on deaf ears.