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Will Trump kill his own based rally?

Trump may bring down the markets after some controversial orders
Trump may bring down the markets after some controversial orders

Wall Street's post-election surge was built on hopes of a pro-growth pro-business agenda getting swiftly implemented. Investors bet big that Trump's promises to slash taxes, unleash infrastructure spending and cut regulation would accelerate the sluggish American economy.

But those hopes are already getting undercut by Trump's turbulent first days in office. Instead of focusing on pushing his stimulus plans through Congress, as investors had hoped, Trump is instead acting first on polarizing issues like the ban on travelers from seven majority-Muslim nations.

The White House has also taken an aggressive stance on trade, raising concerns on Wall Street over the risk of a trade war. In other words, investors want tax cuts, not divisive travel bans.

After a weekend of confusion and protests over the Trump travel ban, the Dow on Monday dropped as many as 223 points before closing down 123 points. It was Wall Street's worst day since Trump's victory. The VIX (VIX), a gauge of market volatility, spiked by 12% - the biggest increase in nearly three months.

Of course, Monday's market pullback barely puts a dent in a post-election rally that had carried the Dow more than 1,700 points higher. In fact, the losses don't even wipe out last week's strong gains as the Dow blew past the 20,000 milestone.

It's only reasonable - and healthy - for the markets to take a breather after such a move. It's especially apt because there are growing doubts that Trump will be able to get his stimulus plans done fast enough to support the big gains on Wall Street.

Trump's promises to cut taxes and ramp up infrastructure spending were always going to be complex and time-consuming to deliver on, even with the GOP in charge of Congress.

The risk is that Trump's early focus on the travel ban, alleged voter fraud and other controversial issues will slow his stimulus plans by emboldening opponents and fracturing would-be allies in Congress.