Trumponomics Daily—Wednesday, March 22

Mark it: Tuesday, March 21, 2017, the day that investors stopped taking President Trump literally. The market just saw its worst day since last fall. And the tumble resulted in part from a late-breaking recognition on Wall Street that the new administration is going to have more trouble than it’s acknowledged delivering on lofty promises. The Trump agenda faces its first real test tomorrow, with House Republican leaders pushing for a vote on their Obamacare replacement plan. That effort is listing badly, facing what for now appears to be suficient opposition from House Republicans on either end of the ideological spectrum to sink the package. Trump has upped the stakes himself, making clear he needs Congress to finish work on healthcare reform so he can move on to his favored prerogatives — the tax cuts, deregulation, and infrastructure spending whose promise helped unleash the market rally in the first place. The president would like to keep things moving like train cars down the track. But as the health debate snags, and Trump’s poll numbers wilt under the weight of his Twitter tirades and persistent questions about his team’s Russia ties, the whole operation more nearly resembles bumper cars: Competing priorities and outright distractions clumsily jockeying for position in a race to nowhere.

The evidence for a stock market reckoning has been hiding in plain sight for months. Goldman Sachs and plenty of others have been warning a correction is imminent as already-inflated valuations pushed higher on hopes of a pro-growth bonanza out of Washington despite signs the administration’s timetable strained credulity. On Tuesday, for the first time since Trump’s victory, the market dropped the Wile E. Coyote routine, whereby it’s resisted gravity by refusing to acknowledge it’d run off a cliff. The S&P 500 fell about 1.1% and the Dow Jones industrial average shed 1.2% in a selloff led by bank stocks, which lost about 4% in their worst day since the Brexit vote last June. White House spokesman Sean Spicer pooh-poohed the suggestion that the dip was a judgment on the president’s performance: “To look at any one day, is, is, is nothing that we’ve ever — we’ve always cautioned. I think overall, it still continges [sic] to be up tremendously… You can’t look at one indices [sic] and say that that is the benchmark of an entire economy.” And it’s true that a one-day Trump Dump doesn’t necessarily presage a Trump Slump. But for an administration that’s happily touted the rally’s high points, Tuesday’s stock swoon only piles more pressure onto the vote tomorrow in the House.

Publishing note: Friday’s edition will be the last of this newsletter. I’m leaving the magazine for a new assignment at the Washington Post. Starting Monday, if you aren’t already, you’ll receive the TIME Politics newsletter, which I highly recommend. To make sure it lands in your inbox, please add time@email.time.com to your address book. And I hope you’ll keep up with me, too, as I switch gigs, which you can do by following me on Twitter.

Tory Newmyer

@torynewmyer

tory_newmyer@fortune.com

Must Reads

Trump Warns House Republicans: Repeal Health Law or Lose Your Seats [NYT]

In a personal visit to Capitol Hill on Tuesday, the president sought to raise the stakes for the House Republican rank-and-file ahead of a vote with enormous consequences for his domestic agenda.

Behind the scenes, bank lobbyists temper expectations for Dodd-Frank overhaul [Reuters]

Financial services lobbyists privately acknowledge their hopes for quick deregulation of the industry are all but dashed as legislation to roll back post-crisis reforms takes its place at the end of a long, slow-moving line.

Carbon tax debate exposed rift among Trump’s aides [Politico]

A proposal to impose a price on carbon, controversial among Republicans, is the latest flashpoint between Gary Cohn, Trump’s top economist, and Steve Bannon, his chief strategist.

Manafort had plan to benefit Putin government [AP]

A decade ago, Trump’s onetime campaign manager signed a $10 million contract with a Russian billionaire to do advocacy work that would “greatly benefit the Putin Government.”

A President’s Credibility [WSJ]

The Wall Street Journal’s pace-setting conservative editorial board laces into the president in an op-ed today, warning that “if he doesn’t show more respect for the truth most Americans may conclude he’s a fake President.”