Wall Street tumbles in its worst day since April after Trump threatens more tariffs on China

Market Reaction - U.S. stocks experienced a significant decline, with the S&P 500 falling 2.7%, marking its worst day since April, while the Dow Jones Industrial Average dropped 878 points (1.9%) and the Nasdaq composite fell 3.6% [1][6] - The market was initially poised for slight gains before President Trump's tariff threat on Chinese imports caused a sharp downturn [2][3] Tariff Threat and Economic Impact - President Trump indicated a potential "massive increase of tariffs" on Chinese imports due to restrictions on rare earth exports from China, which are essential for various manufacturing sectors [2][3] - The escalation in trade tensions has led to widespread declines across Wall Street, with approximately six out of seven stocks in the S&P 500 experiencing losses [3] Stock Valuation Concerns - There are growing concerns that U.S. stocks are overvalued, particularly after a nearly 35% increase in the S&P 500 since April, raising questions about sustainability given the slower growth in corporate profits [4][5] - Levi Strauss saw a significant drop of 12.6% despite reporting stronger-than-expected quarterly profits, indicating market sensitivity to high expectations [5][6] Oil Market Dynamics - The price of benchmark U.S. crude oil fell 4.2% to $58.90 per barrel, influenced by a ceasefire in Gaza and concerns over global trade disruptions due to tariff threats [7][8] - Brent crude, the international standard, also declined by 3.8% to $62.73 per barrel following the tariff announcement [8] Consumer Sentiment and Economic Indicators - Consumer sentiment remains low, with issues such as high prices and job market concerns dominating public perception, as indicated by a University of Michigan report [9][11] - The Federal Reserve has cut interest rates in response to a slowing job market, with potential for further cuts if inflation remains high [10]