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:

• Casino Operator company PENN Entertainment (NASDAQ: PENN) fell 3.3%. Is now the time to buy PENN Entertainment? Access our full analysis report here, it’s free for active Edge members.
• Footwear company Deckers (NYSE: DECK) fell 3.2%. Is now the time to buy Deckers? Access our full analysis report here, it’s free for active Edge members.
• Travel and Vacation Providers company Target Hospitality (NASDAQ: TH) fell 3.7%. Is now the time to buy Target Hospitality? Access our full analysis report here, it’s free for active Edge members.
• Travel and Vacation Providers company Lindblad Expeditions (NASDAQ: LIND) fell 3.3%. Is now the time to buy Lindblad Expeditions? Access our full analysis report here, it’s free for active Edge members.
• Toys and Electronics company Hasbro (NASDAQ: HAS) fell 4%. Is now the time to buy Hasbro? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Hasbro (HAS)

Hasbro’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock gained 16.1% on the news that the company reported strong first quarter 2025 results which significantly exceeded analysts' expectations across revenue, EPS, and EBITDA. The real spark came from Magic: The Gathering and other digital games, which pushed the gaming unit up 46%, a big jump that drove the whole business. Zooming out, we think this quarter featured some important positives.

Hasbro is up 26.2% since the beginning of the year, but at $71.23 per share, it is still trading 13% below its 52-week high of $81.85 from August 2025. Investors who bought $1,000 worth of Hasbro’s shares 5 years ago would now be looking at an investment worth $811.83.

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