Quick question. I know it's stupid and a waste of time to get in arguments. But what to do when someone challenges your intelligence? Or just challenges you.

For example, my friends made a dumb communist joke when we were talking, and some nobody that one of us knows decided to get personal with it. He kept going with the whole 'communism is the ideal ideology' lesson. I just told him to go check out how many people died by communism (which was not a smart thing to engage, but fuck it, I don't know him and he's a maggot) The the guy tells me to read a fucking book, and he said "you retard". Telling me that wasn't the real communism.

No one said anything, I stared right into his eyes and said "you're fucked". He kept going but didn't challenge me again. But my question is, what to do in a situation where someone challenges you or your frame. Assert dominance? Ignore? Challenge?