President Donald Trump's firing of FBI Director James Comey raises concerns that it could create a sideshow that may delay the Trump agenda, analysts said Tuesday evening.
"I think it's still another story that's going to slow down Trump's agenda," said Greg Valliere, Horizon Investments chief global strategist. "We're going to have a budget fight in the next few months. Nobody has any idea what the Senate is going to do on health care. You have another huge story that's going to gobble up more time. It's a distraction for sure."
BMO Private Bank CIO Jack Ablin said he does not expect markets to react to the news, which was released after the close of U.S. trading. But it could add to doubt that already exists about when Congress and the White House will actually tackle the policy most important to markets — tax reform.
Stocks have moved higher to record levels since Trump won the election, but the market is no longer favoring the stocks that would show a clear benefit from Trump's policies on infrastructure spending or even tax reform.
"There's a healthy degree of skepticism among investors already that a lot of these policies that Trump has been bombastically touting around aren't going to get signed into law. This would seem to undermine that confidence," said Ablin.
Valliere said he still expects to see tax reform, but market pros have been questioning when. House Speaker Paul Ryan is scheduled to speak on tax reform Wednesday in Ohio.
"There's only two things I see that could really derail this market. One could be a geopolitical crisis, and I don't see it, and the second would be a sign that tax reform bill is dead, and I don't see it. It's a distraction," Valliere said.