Capital Drama Rattles Wall St. And Stocks Dive

In Economy On

Confidence in President Trump’s agenda to stoke economic growth was questioned Wednesday, as stocks tumbled and the dollar weakened.

The sell-off was startling because it followed months of a steadily climbing, tranquil stock market, a rally that came to be known as the Trump bump. And domestic employment and corporate profits have been strong, usually a boon for stocks.

Yet investors, who have shrugged off previous turmoil in the Trump administration, were clearly rattled by the most recent episode. Some on Wall Street speculated about whether the White House’s pro-business pledges to cut taxes, lighten regulation and increase infrastructure would be thwarted by the growing tumult in Washington. Some bank analysts even discussed the probability of impeachment.

And at a gathering of big money managers in Las Vegas, the former chairman of the Federal Reserve, Ben Bernanke, said he was worried about the stability of Mr. Trump’s leadership.

. . . .

Still, not every investor was unnerved. With the United States job market robust, the prospect of improving growth and a season of healthy corporate earnings ending, the domestic economy is in good shape, some investors said.

That strong foundation cannot be undermined by possible presidential misconduct, they argued, no matter how serious.

In the absence of more negative economic factors a sustained sell-off in the markets was hard to envisage, Brad McMillan, chief investment officer of Commonwealth Financial Network, wrote in a note to clients.

“We might see a bigger drawdown,” or dip in the markets, “but it is likely to be both limited and reasonably short-lived,” Mr. McMillan wrote. “There will be a time to worry, but right now, despite the very real issues being debated, we are still in a good place as investors.”

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