What Happened?

A number of stocks fell in the afternoon session after worries over worsening trade relations with China were triggered by critical comments from President Donald Trump. 

The President's comments, stating on social media that China has 'become very hostile,' have injected significant volatility into the broader markets. This has particularly affected the leisure industry, which is highly sensitive to economic sentiment and discretionary spending. Leisure stocks, which include companies in travel, entertainment, and hospitality, rely on consumers feeling confident enough to spend on non-essential goods and services. Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market. 

Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions. 

The prospect of escalating tariffs raises concerns about economic headwinds, which could lead to a slowdown in consumer spending. If consumers tighten their budgets in response to economic uncertainty, discretionary purchases are often the first to be cut, directly impacting the revenues of companies in this sector.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Leisure Products company American Outdoor Brands (NASDAQ: AOUT) fell 4.1%. Is now the time to buy American Outdoor Brands? Access our full analysis report here, it’s free for active Edge members.
• Apparel and Accessories company ThredUp (NASDAQ: TDUP) fell 4.9%. Is now the time to buy ThredUp? Access our full analysis report here, it’s free for active Edge members.
• Broadcasting company Paramount (NASDAQ: PSKY) fell 3.2%. Is now the time to buy Paramount? Access our full analysis report here, it’s free for active Edge members.
• Casino Operator company Wynn Resorts (NASDAQ: WYNN) fell 4%. Is now the time to buy Wynn Resorts? Access our full analysis report here, it’s free for active Edge members.
• Footwear company Steven Madden (NASDAQ: SHOO) fell 4.1%. Is now the time to buy Steven Madden? Access our full analysis report here, it’s free for active Edge members.

Zooming In On ThredUp (TDUP)

ThredUp’s shares are extremely volatile and have had 59 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 22 days ago when the stock gained 2.7% on the news that the company presented a bullish outlook at the Wells Fargo 8th Annual Consumer Conference, highlighting strong growth and operational improvements. Management showcased a strategic pivot to focus on the U.S. market after exiting Europe, a move that bolstered cash flow. The online consignment store forecasted a 25% jump in revenue for the third quarter. A key driver for this growth stemmed from investments in artificial intelligence, which the company's CEO, James Reinhart, felt were "underhyped." These AI advancements sharpened search results and improved the conversion rate for new customers by 18%. This news arrived amid a favorable market backdrop, as the Federal Reserve's recent interest rate cut provided a lift to consumer discretionary stocks.

ThredUp is up 514% since the beginning of the year, but at $8.66 per share, it is still trading 28.3% below its 52-week high of $12.08 from August 2025. Investors who bought $1,000 worth of ThredUp’s shares at the IPO in March 2021 would now be looking at an investment worth $432.81.

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