Stock indexes dropped sharply today, with the S&P 500, Dow Jones, and Nasdaq all down. President Trump’s threat of increased tariffs on Chinese goods due to trade tensions caused the decline. Bond yields fell to a 3-week low as Fed Governor Waller hinted at rate cuts. Consumer sentiment also dropped to a 5-month low.

The US government shutdown continues to affect market sentiment, delaying key economic reports. Estimates suggest 640,000 federal workers could be furloughed, leading to job losses and an increase in the unemployment rate. The shutdown may also impact inflation data release and consumer spending. Investors are closely watching for updates on tariffs and trade negotiations.

Interest rates are down as 10-year T-notes rally to a 3-week high. Dovish comments from Fed Governor Waller and concerns over the government shutdown support T-notes. European bond yields are also lower. The markets are pricing in a 95% chance of a rate cut at the next FOMC meeting. ECB members suggest no immediate rate changes are likely.

Chipmakers and energy companies are dragging the market down today, with many stocks seeing declines of over 2%. Several companies, including Levi Strauss and Mosaic, reported lower-than-expected results. On the positive side, some stocks like Applied Digital and Centrus Energy are up. Earnings reports are expected from a variety of companies on October 10th.

Read more at Nasdaq: Stocks Tumble as Chinese Trade Tensions Resurface