How would you handle this situation in the classroom?

After Wind-Wolf was denied the opportunity to play with his classmate after school because he was Native American, the next day the classmate entered your class and said, “No one should play with Wind-Wolf, because my mommy said that he is an Indian and we are White and we just don’t play with those kind of people. They’re gross! Now how many of you are on my side?” The kids looked around and then began to chant “Don’t play with Wind-Wolf, Don’t play with Wind-Wolf.” Wind-Wolf bowed his head in shame.