NEW YORK — Wall Street is increasingly doubting President Donald Trump’s ability to make America great again anytime soon.

A furious market rally sparked by Trump’s surprise win in November is stalling out as investors grow increasingly worried that the new administration won’t deliver a sweeping tax overhaul — or other jolts to the economy — by its self-imposed August deadline.


After racing ahead 15 percent in the four months after the election, the Dow Jones Industrial Average is now down about two percent over the last month, essentially treading water after the collapse of Trump’s efforts to repeal Obamacare. Bond yields and the dollar are sagging, suggesting dwindling hopes for a quick economic boom.

The March employment report out on Friday showed the economy added just 98,000 jobs last month, well below expectations, while the unemployment rate dipped to 4.5 percent, its lowest level since early 2007.

The numbers suggest that the economy is operating at close to its full potential. And with the Federal Reserve engaged in a campaign of interest rate hikes, the pressure is on Trump and the Republican Congress to kick growth into a higher gear.

But as fresh rumors circulate almost daily on what Trump’s promised tax plan might feature — including provisions opposed by many Republicans on Capitol Hill — confidence in the president’s ability to fundamentally reshape the American economy is flagging.

“We are seeing a relatively broad-based scaling back of the exuberant optimism we saw in many markets after the election,” said Libby Cantrill, head of public policy at bond giant Pimco. “This is in part a recognition that even though there is one-party control in Washington, real divisions remain within the Republican conference. But even more so, it is the understanding that tackling health care policy and tax reform in one year is ambitious under the best of circumstances.”

The skeptics now include Goldman Sachs, the Wall Street investment bank whose alumni, including Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, are the driving forces behind the Trump administration’s push for sweeping tax reform.

Mnuchin has repeatedly pledged to get a big tax package to Trump’s desk by the August congressional recess. And he’s celebrated the market rally as evidence of confidence in the president’s ability to improve the economy.

But Goldman recently told clients to tamp down their expectations for tax reform, and stocks sensitive to tax reform, infrastructure spending and deregulation have reversed their post-election gains. “Our economists continue to expect corporate tax cuts late this year but few major reforms to the tax code,” Goldman said a recent research note.

Wall Street concern extends beyond a pause in the stock market rally. After selling off sharply following the election, sending yields higher on expectations for faster growth and higher inflation under Trump, bond prices have been rising with yields falling, indicating less faith in the president’s ability to accelerate economic growth.

The dollar, which also rallied strongly following Trump’s win on hopes for robust growth, has erased some of its post-election gains.

Much of the concern on Wall Street is that any delay in the implementation of a lower corporate tax rate, a repatriation of the $2.5 trillion in cash U.S. companies currently have stashed overseas and a big infrastructure spending package would slow any impact the moves could have on a U.S. economy.

Continued improvement in the labor market, which Trump has been hailing in recent months, could spur the Federal Reserve to continue scaling back its own stimulus. That would leave investors waiting for other steps from Washington to boost the economy.

Trump during the campaign promised to juice the U.S. economy’s growth rate up to four percent or better, from around two percent now, but he won’t be able to do that without getting a major economic package through Congress.

Even if the White House defies expectations and secures a big stimulus by August, the impact likely wouldn’t be felt until 2018. Any delays could push the impact even later, perhaps beyond next year’s midterm elections, potentially complicating matters for Republicans already dealing with an unpopular president and fallout from the health care fight.

The widely held view on Wall Street now is that the rally can no longer be sustained by hope for Trump promises. His policies need to quickly make their way toward law.

“Having rallied strongly in response to pro-growth policy announcements, markets naturally started looking for validation via detailed policy design and implementation,” said Mohamed El-Erian, chief economic adviser at Allianz. “Both were impacted by the setback on health care which the administration sequenced ahead of tax reform and infrastructure — first by delaying the rollout of the specifics of the pro-growth policies, and second, by raising questions on their smooth sailing notwithstanding Republican majorities in both houses of Congress.”

Instead of headlines about progress, Wall Street is now confronted by trial balloons about what the tax package could include.

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A sharp divide has already emerged in Congress over including a border-adjustable tax that could raise more than $1 trillion over 10 years to cover a reduction in the corporate rate of 35 percent. Trump wants to push the rate as low as 15 percent.

House Speaker Paul Ryan and House Ways and Means Chairman Kevin Brady support the border-tax measure — as do many big American exporters who could see big rate reductions. But many Republican senators along with retailers, oil refiners and other industries that could see their tax bills climb in the short run strongly oppose it.

But dropping the BAT could leave the White House and Congress struggling to find other ways to limit a big tax cut’s impact on the deficit. A recent Washington Post report suggested the White House could back a carbon tax or a value-added tax to create fresh revenue. The administration quickly shot down that report. And Brady went on CNBC and told investors both were non-starters on Capitol Hill.

“Both the House and Senate in recent years have weighed in pretty heavily with resistance against those ideas,” he said, adding that some form of border adjustment, meant to tax imports but not exports, would remain part of an eventual GOP tax plan.

Defenders of the White House say quick passage of tax reform remains possible if the administration does not try to include changes to the individual tax code and avoids controversial changes like the border, carbon and value-added taxes.

“He's already got a good business tax plan that I and others helped write,” said Larry Kudlow, a Republican policy veteran who advised Trump during the campaign. “Make it simple and pass what you’ve got. And then you can pencil in 3 percent real economic growth and reduce the deficit by $3 trillion.”

“You can’t avoid the worries on Wall Street, but with health care going away you’ve now got four good months” to address business taxes by the August recess, Kudlow said. “It’s still doable.”