Stock markets took a brief tumble on Monday, the first full day of trading after President Trumpâs efforts at health care reform fell short, an apparent sign to investors that hopes of tax reform and financial stimulus may be in doubt.
The major market indicators fell to their lowest levels since early February in intraday trading on Monday. After dropping about 1 percent in the morning, the benchmark Standard & Poorâs 500-stock index later recovered. Near midday, it was down slightly.
Leading the market lower were shares of banks and other financial companies. Shares of both Goldman Sachs and Bank of America were down more than 1 percent; Morgan Stanley stock was down more than 2 percent.
While recent declines in the market have been very modest from a historical perspective, they have nonetheless rattled the narrative told since the November election that no amount of political turmoil in Washington or elsewhere would distract investors focused on Mr. Trumpâs pledges to cut taxes and roll back regulation.
Buoyed by the promise of both houses of Congress and the White House being in Republican control, investors had narrowed their sights on such measures that would be friendly to business, as well as the pro-growth stimulus of infrastructure spending.
But the collapse on Friday of a health care bill â a legislative priority that not only dominated much of Mr. Trumpâs first two months in office, but also much of his election campaign â has cast uncertainty on the other parts of his agenda. Congressional Republicans have already started discussing scaling back ambitious tax reform plans.
âThe U.S. market had already started to weaken over the last month over concerns about the U.S. administration, and the reform agenda that they had,â said Graham Secker, a London-based equities strategist at Morgan Stanley. âIt crystallized those concerns on Friday.â