The Ivy League school has filed suit to halt a US federal freeze on more than $2.2bn in grants.
Nadine Menendez, 58, guilty of bribery and fraud related to using her husband's influence on behalf of Egypt.
S&P 500 falls 2.36 percent, while Nasdaq Composite drops 2.55 percent amid fears for central bank's independence.
China is a far bigger trading partner than the US for most countries. That limits what Trump can demand, experts say.