US stocks fall as vote for Trump’s healthcare reform is delayed.
A delay vote of President Trump’s healthcare reform plan resulting in a lack of confidence in the current administration’s legislative agenda saw US stocks (primarily in the tech sector) tumble, contributing significantly to the month’s lowest close.
Political uncertainty surrounding the proposed healthcare legislation has also worried many investors, further aggravated by dampening hopes that the proposed tax cut reforms and fiscal stimulus promised by the White House will not go through.
The biggest losers include high-value companies, with Facebook losing 2.0 per cent, Netflix losing 4.1 per cent and Tesla Motors losing 4.0 per cent. Comcast fell 0.9 per cent, Verizon fell 1.9 per cent, AT&T fell 1.1 per cent and T-Mobile US declined 3.2 per cent.
Google-parent Alphabet which lost 2.5 per cent following a €2.4 billion fine imposed by the EU for illegal bias toward its shopping service in search results.
The Nasdaq Composite Index comprising these high-value stocks fell 100.53 points to 6,146.62 as a result. The Dow Jones Industrial Average fell 98.89 points to 21,310.66 and the S&P 500 fell 19.69 points to 2,419.38; its biggest decline since October last year.
Aluminium Arconic suffered a catastrophic 9.0 per cent fall in the aftermath of the London apartment fire disaster in which bad cladding was implicated.
The lack of solid details in Trump’s economic plans have also caused the IMF to cut its 2017 and 2018 projections on US growth, warning that “significant policy uncertainties imply larger-than-usual” risks to the economic outlook. It criticised the Trump administration’s plans to cut spending and lowering the country’s economic growth outlook.
Despite this, Darden Restaurants recorded a gain of 2.9 per cent and Sprint 2.3 per cent as a result of its discussions with cable giants Comcast and Charter Communications on a partnership that would allow the cable providers to sell their services on Sprint’s wireless network.
Others are cautioning against overreacting to the troubled healthcare proposal, with some experts saying that whether or not the bill gets passed isn’t a clear indicator whether or not the new tax cuts get approved, let alone whether or not the economy will continue to improve.