Here are some key factors
- Aggressive Tariff Threats Against China
President Trump announced a steep increase in tariffs (100%) on Chinese imports and new export controls for critical U.S. software. This escalation in the U.S.–China trade conflict rattled markets, especially affecting tech and semiconductors. - Elevated Geopolitical & Policy Uncertainty
The sudden nature of the announcement, along with the refusal to continue planned diplomatic engagement, injected more volatility into markets already skittish about policy risk. - Overvaluation & Tech Exposure
The market had been extended, particularly in technology and AI-hyped stocks. In times of stress, those sectors tend to get hit harder. - Flight to Safety / Rebalancing
As risk appetites declined, investors have reallocated toward safer assets (e.g. bonds, gold). The pullback in equities is part of that rotation. - Macroeconomic & Policy Headwinds
• The specter of tariffs increasing inflation
• Unclear path for future interest rate cuts
• Concerns about corporate earnings under higher input costs
• Ongoing government shutdown delaying economic data and adding political uncertainty
