Stocks fall as investors fear for GOP agenda

Stocks fall as investors fear for GOP agenda
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United States stocks on Wednesday experienced their biggest losses since September.

The Dow Jones Industrial Average sank roughly 370 points on the day. The S&P 500 dropped 1.6 percent  while the Nasdaq fell 2 percent.

Wednesday’s drop was the largest for the Dow and S&P since September, after months of stable gains and few slumps under President Trump. Investors came into Trump presidency optimistic that he could work with Congress to pass tax reform, an infrastructure bill and financial deregulation.

That initial optimism appears to have faded as trouble passing healthcare reform delayed work on building a consensus around tax reform. Some investors say they’re losing confidence in President Trump and the GOP’s ability to execute its economic agenda.

Daniel Alpert, managing partner at investment firm Westwood Capital, said the market's decline reflected "a reassessment of its irrational exuberance."

"The Trump Bump was the result of wildly optimistic expectations of what a Trump presidency would mean to economic performance and corporate/individual taxation," Alpert said. "The bottom line is live by Trump, die by Trump.

But Sen. Chuck GrassleyCharles (Chuck) Ernest GrassleyGrassley: 'Good chance' Senate panel will consider bills to protect Mueller Overnight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea GOP state lawmakers meet to plan possible constitutional convention MORE (R-Iowa), when asked about the stock market and the GOP agenda, told The Hill Congress' agenda hasn't stalled. 

"As long as Congress does its job under the Constitution, nothing is going to stall because we don’t have to wait for a president," Grassley told reporters. "In fact a lot of people in Congress get irritated when presidents interfere and that's why we have separation of powers, so Congress can do its own."
 
He added he’s confident tax reform can get done before the end of 2017, having just come from a meeting with Treasury Secretary Steven Mnuchin and the Finance Committee.
 
“He is very confident that they’ll get the job done,” Grassley said.

The billowing scandal surrounding President Trump and Russia has cost Republicans time and capital to craft economic policy.

The New York Times reported Tuesday that Trump asked former FBI director James Comey to halt the FBI’s investigation into former National Security Adviser Michael Flynn. The news broke exactly one week Trump fired Comey, and less than a week after Trump told NBC his irritation with the Russia investigations influenced his decision to fire the director.

The Dow Jones sank as much as 290 points or roughly 1 percent in the first hours of trading. The S&P 500 dropped more than 25 points, or roughly 1 percent, while the Nasdaq fell almost 100 points -- 1.6 percent -- in the same time. Several financial services lobbyists and bankers told The Hill that they fear the Russia investigations will squander opportunities to cut corporate taxes and roll back Obama-era financial regulations.

Wall Street’s waning confidence also puts the White House in an awkward position. CNN displayed the Dow’s loses while broadcasting Trump’s commencement address to the U.S. Coast Guard Academy, in which the president discussed how unfairly he feels he is treated by media.

Trump and his aides were quick to take credit for the soaring market earlier this year, which Mnuchin called a barometer for the administration’s economic policy. Mnuchin also jokingly asked investors to thank him for rising stock prices at an April investment summit.

"There's a lot of confidence in the Trump administration and in the desire to invest in the U.S.," Mnuchin said in February. "This is a very competitive place to do business. We've got great companies, and you see that reflected in the markets."

But the administration has distanced itself from the market when it falters. During a six-week stretch of falling stocks, White House Press Secretary Sean Spicer insisted “You can’t look at one indices and say that’s the benchmark for an entire economy.

Scott Wong contributed to this article, which was updated at 4:09 p.m.