Market Reaction - U.S. stocks experienced a significant decline, with the S&P 500 dropping 2.7%, the Dow Jones Industrial Average falling 878 points (1.9%), and the Nasdaq composite decreasing by 3.6% following President Trump's tariff threat on China [1][9]. - The market had initially been poised for slight gains before Trump's announcement, which indicated a potential "massive increase of tariffs" on Chinese imports due to trade tensions [2][3]. Economic Implications - The tariff threat has raised concerns about its impact on global trade, potentially leading to reduced economic activity and lower fuel consumption [11]. - Federal Reserve Governor Chris Waller noted that tariffs have resulted in price increases for higher-income consumers, while companies have absorbed costs for lower-income shoppers [5]. Sector Performance - The stock market saw widespread declines, with approximately six out of seven stocks in the S&P 500 falling, affecting both large tech companies like Nvidia and Apple, as well as smaller firms [6]. - Levi Strauss experienced a notable drop of 12.6% despite reporting stronger-than-expected quarterly profits, indicating market challenges due to heightened expectations [8][9]. Oil Market Dynamics - The price of benchmark U.S. crude oil fell by 4.2% to $58.90 per barrel, influenced by geopolitical developments and concerns over global trade disruptions [10][11]. - Brent crude also saw a decline of 3.8% to $62.73 per barrel, reflecting the broader market sentiment following the tariff threat [11]. Consumer Sentiment - Consumer sentiment remains low, with ongoing concerns about high prices and job prospects, leading to a Federal Reserve interest rate cut [12]. - A preliminary survey indicated a slight decrease in consumer inflation expectations, which could provide some relief for the Federal Reserve in managing inflationary pressures [13].