With the S&P dropping more than 2%, bringing its slide from the all time highs just two weeks ago to more than 5%, semiconductors which are most directly exposed to Chinese trade, and banks stocks, which are sensitive to interest rates, are among the hardest hit sectors.

As widely expected, President Trump himself joined the fray and on Monday morning tweeted about China and the Fed saying: "China dropped the price of their currency to an almost a historic low. It's called 'currency manipulation.' Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!" In doing so, he once again confirmed that he is using trade war as leverage to get Powell to cut rates further, as BofA showed in the following simple schematic: