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:

• Consumer Electronics company GoPro (NASDAQ: GPRO) fell 12.1%. Is now the time to buy GoPro? Access our full analysis report here, it’s free for active Edge members.
• Real Estate Services company The Real Brokerage (NASDAQ: REAX) fell 2.7%. Is now the time to buy The Real Brokerage? Access our full analysis report here, it’s free for active Edge members.
• Apparel and Accessories company Stitch Fix (NASDAQ: SFIX) fell 10.9%. Is now the time to buy Stitch Fix? Access our full analysis report here, it’s free for active Edge members.
• Gaming Solutions company DraftKings (NASDAQ: DKNG) fell 5.8%. Is now the time to buy DraftKings? Access our full analysis report here, it’s free for active Edge members.
• Apparel and Accessories company Carter's (NYSE: CRI) fell 6.6%. Is now the time to buy Carter's? Access our full analysis report here, it’s free for active Edge members.

Zooming In On GoPro (GPRO)

GoPro’s shares are extremely volatile and have had 70 moves greater than 5% over the last year. But moves this big are rare even for GoPro and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 3 days ago when the stock dropped 4.4% on the news that a collection of negative economic data pointed to a weakening economy, raising concerns about consumer spending on non-essential items. The latest Survey of Consumer Expectations from the New York Fed revealed that households' short-term inflation expectations rose, while their outlook on the labor market deteriorated. Consumers expressed greater concern about potential job losses and expected lower earnings growth. Adding to the unease, the Chief Economist at Moody's Analytics warned that 22 states demonstrated clear signs of a recession. The U.S. government shutdown further dampened sentiment, threatening to weigh on incomes and purchasing power for consumer electronics companies.

GoPro is up 81.8% since the beginning of the year, but at $2.00 per share, it is still trading 30.6% below its 52-week high of $2.88 from September 2025. Investors who bought $1,000 worth of GoPro’s shares 5 years ago would now be looking at an investment worth $294.12.

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