By Noel Randewich
6:12 PM EST
"Expectations of those tax cuts are a major reason for the 10-percent surge in the S&P 500 since Trump's election."
Wall Street fell sharply on Tuesday as investors worried that President Donald Trump will struggle to deliver promised tax cuts that propelled the market to record highs in recent months, with nervousness deepening ahead of a key healthcare vote.
The S&P 500 and Dow Jones Industrial Average lost over 1 percent in their worst one-day performances since before Trump's election victory in November.
The S&P financial index .SPSY sank 2.87 percent, its biggest daily fall since June. That added to losses in the sector since the Federal Reserve last week raised interest rates by 25 basis points and signaled it would remain on a gradual pace of hikes, a less aggressive stance than some investors expected.
Republican party leaders aim to move controversial healthcare legislation to the House floor for debate as early as Thursday. But they can only afford to lose about 20 votes from Republican ranks, or risk the bill failing, since minority Democrats are united against it.
With valuations stretched, investors see the Trump administration's struggles to push through the healthcare overhaul as a sign he may also face setbacks delivering promised corporate tax cuts. Expectations of those tax cuts are a major reason for the 10-percent surge in the S&P 500 since Trump's election.
The market is starting to get a little fed up with the lack of progress in healthcare because everything else is being put on the back burner," said RJ Grant, head of trading at Keefe, Bruyette & Woods in New York.
(Additional reporting by Chuck Mikolajczak and Sinead Carew in New York ...)