Wall Street tumbles as Trump threatens new China tariffs

Market Reaction - U.S. stocks experienced a significant decline, with the S&P 500 dropping 2.7%, marking its worst day since April, while the Dow Jones Industrial Average fell by 878 points (1.9%) and the Nasdaq composite decreased by 3.6% [1][8] - The selloff was widespread, with approximately six out of every seven stocks in the S&P 500 declining, affecting both large tech companies like Nvidia and Apple, as well as smaller firms [3] Economic Context - The market had been under scrutiny for potentially being overvalued, following a nearly 35% increase in the S&P 500 since April, raising concerns about the sustainability of such high prices relative to corporate profits [4][5] - The artificial intelligence sector is particularly scrutinized, with fears of a repeat of the 2000 dot-com bubble, indicating that either stock prices need to decrease or corporate profits must increase for valuations to appear more reasonable [5] Company-Specific Movements - Levi Strauss saw a notable decline of 12.6% despite reporting stronger-than-expected quarterly profits, suggesting that heightened expectations may have contributed to its stock price drop after a 42% surge earlier in the year [7] Commodity and Bond Market Response - The oil market reacted sharply, with U.S. crude prices falling by 4.2% to $58.90 per barrel, influenced by geopolitical developments and concerns over global trade disruptions due to tariff threats [9][10] - In the bond market, the yield on the 10-year Treasury decreased to 4.05% from 4.14%, reflecting market reactions to economic sentiment and potential Federal Reserve actions [10][11]