Wall Street Waiting to Take Cue from Trump’s First Legislative Test

Tuesday was the worst day for the indices on the Wall Street since November 8th, but Wednesday was better. Though there was relatively lacklustre trading performance, the major averages managed to end the session mixed. Dow Jones Industrial average closed 6.71 points down at 20,661.30, Nasdaq was up by 27.82 to end the day at 5,821.64, and S&P 500 also closed almost flat with 4.43 points up at 2,348.45.

The start of the day was shaky, but then technology and industrial companies came to rescue. Apple shares were the biggest boost to all the three major indexes rising nearly 1.7 percent, while the banking shares tried to pull the indices down. The disappointing quarterly results of Nike led its shares to take the biggest one day battering in the last five years. The shares of the retailer Sears also took a severe beating after it raised concerns that it might be difficult for the company to pull through in future.

On Tuesday, the markets had rising concerns that President Donald Trump might falter on his promises like increased infrastructure spending and tax cuts. These were the two main drivers that led the rally on the Wall Street since November. The Wall Street is now focused on President Donald Trump’s struggle to push through a healthcare bill. It looks like the American Health Care Act backed by the Republicans is in trouble. The Republican plan to repeal and replace Obamacare faces an uphill task in the Senate when it is due for House vote on Thursday.

A multi-asset strategist for BlackRock, Terry Simpson said, “The market really wants to believe in the new administration. But if the bill falters in the House on Thursday or the Senate, later on, investors will have increased doubt in the ability to pass the pro-growth agenda.”

The Republican lawmakers and Trump appear to be losing the support on the controversial healthcare legislation that is scheduled for a vote on Thursday in the House of Representatives. This is the first litmus test for the new administration and if this bill fails then it will raise a question mark on the other promises of Trump that he made on tax reforms and increased infrastructure spending.

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