Wall Street could witness another sell-off if President Donald Trump’s tax reform plan gets bogged down, CNBC’s Jim Cramer warned on Monday.
“I still think that Trump with Gary Cohn and a different team working to try to get this through we’ll have some luck,” Cramer said on “Squawk on the Street.”
U.S. stocks opened sharply lower Monday, the first business day after the scheduled House vote on a repeal of Obamacare was pulled because Trump and House Speaker Paul Ryan had failed to gain enough support from Republicans.
In the first hour of trading Monday, the Dow was down about 130 points and the S&P 500 and Nasdaq composite fell more than 0.5 percent.
The GOP’s American Health Care Act was a key component of Trump’s agenda. The president said Friday the administration would instead move to slashing taxes.
During an Axios event in Washington on Friday, Treasury Secretary Steven Mnuchin said he will push for “comprehensive” tax reform by Congress’ August recess.
Like repealing and replacing Obamacare, reducing tax rates was a central promise by Trump during his presidential campaign. Investors have had doubts about the time frame for a tax proposal, with some not expecting reform until next year.
Mnuchin said Friday the objective for tax reform is a tax cut for the middle class, not the top 1 percent.