U.S. stocks turned lower after President Donald Trump threatened to slap a “massive increase” of tariffs on Chinese products imported into the United States to counter new export controls that China imposed on rare earths from the nation. Notably, Trump also threatened to cancel his upcoming meeting with Chinese President Xi Jinping, which adds another level of uncertainty to the trade talks and tariffs.
The tech sector led the downturn, with the Nasdaq 100 down 2.8% at 1:19 p.m. Investors seemed to be looking at the consumer staples sector as a shelter in the sudden trade storm.
The top three gainers in the Dow Jones Industrial Average were Coca-Cola (NYSE:KO), McDonald’s (NYSE:MCD), and Walmart (WMT) as investors turned more cautious. In the S&P 500 Index, the two biggest gainers were PepsiCo (PEP) +3.4% and Philip Morris International (NYSE:PM) +2.7%. Consumer defensive names Campbell’s Company (CPB), Dollar General (DG), Altria (MO), Mondelez International (MDLZ), and Kroger (KR) were all solidly higher.
The Consumer Staples Select Sector SPDR Fund ETF (NYSEARCA:XLP) was up 0.5% to outperform major market indexes and broad retail ETFs. XLP has been an underperformer in 2025 amid the rush into AI stocks and crypto names. The top ten holdings in the fund are Walmart (WMT), Costco (COST), Procter & Gamble (PG), Coca-Cola (NYSE:KO), Philip Morris International (NYSE:PM), Mondelez International (MDLZ), Altria Group (MO), PepsiCo (PEP), Colgate-Palmolive (CL), and Monster Beverage (MNST).