The "Trump Rally" drove the Dow up 16% between Election Day and March 1, when it hit an all-time high of 21,115. But today the Dow opened down 172 points, or nearly 1%, from Friday's close after Republicans failed to repeal and replace Obamacare.
As the Trump agenda stalls, investors are worried a stock market crash is coming…
And investors are right to consider the possibility of a stock market crash in 2017.
Today (March 27), the CBOE Volatility Index jumped 1.5% to hit its 2017 high of 14.86. The "VIX" measures how much volatility traders are expecting on the stock market. The higher it goes, the more fearful traders are getting.
And that fear level is rising because the "Trump Rally" sent stocks to perilous highs and the optimism that inflated stock prices is coming to an abrupt end…
Why the Healthcare Bill Has Investors Preparing for a Stock Market Crash
Since Donald Trump won the presidency on Nov. 8, the Dow smashed through the 20,000 and 21,000 levels in its fastest 1,000-point jump in history. And it ended February on a string of 12 straight record-high closes.
But the optimism that pushed stocks to all-time highs could end with a market crash.
Stocks soared because traders were so optimistic about President Trump's policies leading to economic growth. President Trump promised to repeal Obamacare, slash individual and corporate taxes, and to push through a massive infrastructure spending bill. Those policies could have sent money flowing back to American companies, boosting their profits.
"President Trump had a simple message on the campaign trail – spend, spend, spend. And that's what the markets are reacting to now that he's won," explained Money Morning Chief Investment Strategist Keith Fitz-Gerald during the early stages of the "Trump Rally" on Nov. 18.
But now that Republicans failed to pass their Obamacare replacement, a project seven years in the making, all of President Trump's policy goals are in doubt, including his ability to deliver a proposed $1 trillion infrastructure spending bill.
And that means a 2017 stock market crash is a serious possibility as investors sour on the prospects of a major economic overhaul…