Tighter Chinese rare-earth controls and sharp presidential rhetoric sparked declines in leisure and consumer stocks, highlighting supply-chain and sentiment risks.
U.S. stocks slid in afternoon trade after President Trump described China as "very hostile" and suggested canceling a meeting with President Xi, amplifying market volatility.
The sell-off followed Beijing's announcement of tighter export controls requiring government approval for products containing certain rare-earth materials. Those materials are critical inputs for chips, electric vehicles, defense systems, and other high-tech goods, so the move raised supply-chain and geopolitical concerns.
Leisure and consumer-discretionary names were hit hardest as investors worried that escalating trade frictions and potential tariffs could weaken consumer confidence and discretionary spending. Notable moves included Inspired (INSE) down 4.9%, Offerpad (OPAD) down 4.7%, Peloton (PTON) down 4.7%, Tapestry (TPR) down 4.1%, and G-III (GIII) down 5.1%.
G-III has shown pronounced volatility over the past year, with a dozen moves exceeding 5%. The stock is down 21.4% year-to-date and trading around $25.17, roughly 30% below its 52-week high of $36.10. A recent 3.4% drop was linked to uncertainty from an ongoing U.S. government shutdown, which has paused key economic data releases and pressured broader indices.
Investors warned that a market correction is more likely than markets currently price in, a reminder that geopolitical supply-chain shifts can quickly reshape sector risk and create buying opportunities for long-term investors.