Major averages fell on above average volume with the NASDAQ Composite having an outside reversal for its worst daily loss since September 2016. Financials led the selling. It marked the first time in 110 days where the indexes saw a 1% or greater decline.
While investors have been betting that the policies Trump is expected to pursue will accelerate economic growth and boost corporate profits, they may be realizing that some policies. such as the new health care bill, may encounter stiff opposition, or that it may take some time for such policies to come to pass. Thus the upcoming health care bill may set perception regarding ease or difficulty in Trump getting his policies passed. Thus the market perhaps is taking a cautious "sell now" approach.
“I think that investors are kind of starting to discount the likelihood of the immediacy of [President Donald Trump’s] policies and the enthusiasm has come off the boil as a lot of his policies got mired in legislative process,” said Jack Ablin, chief investment officer at BMO Private Bank. “Investors are not throwing in the towel but they are resetting their expectations.”
A number of leading names were hit hard in yesterday's selloff. In some cases the action had the look of stocks having the rug pulled out from underneath them, as the charts of stocks like FB, BABA, SQ, NFLX, TSLA, AMZN, and others show. At times like this, risk-management is critical, so investors must always determine where their exit points in the event a long position begins to turn against them, and to adhere to those exit points.