Today was the day Wall Street ran out of patience since, with expectations that Trumpcare will go down in defeat later this week, there are now even greater expectations that tax reform and other economic policies will also not come to pass, not for a good while anyway.  Even the President’s most ardent supporters are now looking at their pocketbooks and having a hard time defending the status quo in the face of all the distractions.  Thus began a sell off that brought the Dow down a very big 237 points, the biggest one-day drop since before the election.  It is not helping matters that Trump is insistent that the new healthcare bill must pass before he will get to taxes.  To be completely fair though, it is also not helping matters at all that the S&P is currently valued at 18 times earnings when it should be at 15.  Thus, everyone is bracing for an overdue correction.  Raw nerves have sent the VIX up a substantial 10% and this same anxiety is reflected in the way above average volume of 8.3 billion shares.

BUSINESS NEWS | Tue Mar 21, 2017 | 6:12pm EDT

Wall Street sinks on fears of delays to Trump tax cuts

By Noel Randewich

DJ: 20,668.01  -237.85     NAS: 5,793.83  -107.70      S&P: 2,344.02  -29.45      3/21

(Reuters)  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.

Banks benefit from higher interest rates and their stocks are sensitive to changes in expectations of how quickly the Fed will adjust rates. Bank of America (BAC.N) slumped 5.77 percent, the biggest drag on the S&P 500, while a 3.72-percent drop in Goldman Sachs (GS.N) pulled the Dow lower.

"There was a feeling the Fed was going to possibly be more hawkish last week. That didn't happen," said Mark Kepner, managing director at Themis Trading in Chatham, New Jersey. "That takes a little out of the higher rates that the banks want."

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.

The Russell 2000 index of smallcap stocks fell 2.71 percent, its worst day since September.

The financial sector has been the best performing of the 11 major S&P sectors since Trump's election, surging 18 percent on his proposals to cut bank regulations and reduce taxes.

The Dow Jones Industrial Average .DJI dropped 1.14 percent to end at 20,668.01 points, while the S&P 500 .SPX lost 1.24 percent to 2,344.02.  The Nasdaq Composite .IXIC fell 1.83 percent to 5,793.83.

The CBOE Volatility index .VIX, Wall Street's "fear gauge", jumped 10 percent.

Under Trump, Wall Street has become unaccustomed to steep selloffs. The last time the S&P 500 lost 1 percent or more in a day was 110 trading sessions ago on October 11. Over the past two years, the S&P 500 has suffered losses of 1-percent or more about once every 11 sessions, according to Thomson Reuters data.

But investors have grown worried about elevated valuations. The S&P 500 is trading at about 18 times forward earnings estimates against the long-term average of 15, according to Thomson Reuters data.

Shares of FedEx Corp (FDX.N) dropped 3 percent in extended trade after the delivery company's quarterly report disappointed investors.

Declining issues outnumbered advancing ones on the NYSE by a 3.92-to-1 ratio; on Nasdaq, a 5.25-to-1 ratio favored decliners.

The S&P 500 posted 27 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 78 new highs and 79 new lows.

About 8.3 billion shares changed hands in U.S. exchanges, compared with the 7.1 billion daily average over the last 20 sessions.