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

Market Overview - The S&P 500 experienced a significant decline of 2.7%, marking its worst day since April, while the Dow Jones Industrial Average fell by 878 points (1.9%) and the Nasdaq composite dropped 3.6% [1][9][15] - The market was initially poised for slight gains before President Trump announced potential "massive increases of tariffs" on Chinese imports, which escalated trade tensions [2][15] Trade Tensions - Trump's comments regarding tariffs were in response to China's restrictions on rare earth exports, critical for manufacturing various products [2][15] - The heightened trade hostility has led to widespread declines across Wall Street, with approximately six out of seven stocks in the S&P 500 falling [4][15] Market Valuation Concerns - There are growing concerns that U.S. stock prices have risen too high, particularly after a nearly 35% increase in the S&P 500 since April [7][15] - Critics argue that the market appears expensive as stock prices have outpaced corporate profit growth, raising fears reminiscent of the 2000 dot-com bubble [8][15] Company Performance - Levi Strauss saw a notable decline of 12.6% despite reporting stronger-than-expected quarterly profits, indicating potential challenges from heightened market expectations [8][9][15] - The overall performance of the S&P 500 saw a drop of 182.60 points, closing at 6,552.51, with the Dow and Nasdaq also experiencing significant losses [9][15] Oil Market Reaction - The price of benchmark U.S. crude oil fell by 4.2% to $58.90 per barrel, influenced by a ceasefire between Israel and Hamas, which alleviated concerns over oil supply disruptions [10][15] - Brent crude also saw a decline of 3.8% to $62.73 per barrel, reflecting broader market anxieties regarding global trade and economic activity [10][15] Consumer Sentiment and Economic Outlook - Consumer sentiment remains low, with concerns about high prices and job prospects, leading to a Federal Reserve interest rate cut last month [11][15] - A preliminary survey indicated a slight decrease in consumer inflation expectations from 4.7% to 4.6%, which may provide some relief for the Fed [12][15] International Market Impact - Stock markets in Europe and Asia also experienced declines, with Hong Kong's Hang Seng falling 1.7% and France's CAC 40 dropping 1.5% [13][15] - In contrast, South Korea's Kospi rose by 1.7% after reopening following a holiday, indicating mixed reactions in international markets [13][15]