Stock markets opened lower Monday amid continued investor concerns that Republicans’ failure Friday to advance healthcare legislation spells trouble for President Trump’s broader legislative agenda.
The Dow Jones Industrial Average fell more than 120 points or 0.6 percent in the first half hour of trading Monday, and other stock indices also declined slightly. The Dow is down 2 percent on the week along with other markets.
House Republicans’ inability to unite around an Obamacare replacement measure backed by the White House likely explains part of the slippage in investor expectations.
“The defeat has added to doubts about the ability of the president and congressional Republicans to follow through on tax reform — next on the to-do list after health care — and infrastructure spending,” High Frequency Economics’ economist Jim O’Sullivan wrote Monday morning.
Trump officials promised over the weekend that they would quickly turn to implementing tax reform and other agenda items, but Trump’s inability to reach a legislative deal with the Republican Congress could sow doubt about his ability to get success in those areas as well.
A related issue is that Republicans see tax reform as a harder lift without the tax changes included in the Obamacare repeal measure in place.
What investors “cared about, with respect to healthcare reform, was the savings that it would give politicians to be able to grant even larger tax cuts,” explained PIMCO market strategist Tony Crescenzi, speaking Monday morning on Bloomberg Radio.
Nevertheless, stock markets remain up nearly 9 percent since Election Day.
