Market guru Art Cashin warns that the recent bull market may be losing some steam after its long honeymoon since the election of Donald Trump.
The S&P 500 and the Dow Jones Industrial Average were on track for their first back-to-back losses in more than a month, led by declines in drug and bank stocks, Reuters reported.
Pharmaceutical stocks came under fire after President Donald Trump tweeted that he was working on a new system to increase competition in the drugs industry and bring down prices.
Trump also backed a draft bill unveiled by Republicans on Monday to repeal and replace the Obamacare healthcare law but said the bill was open to negotiation.
"It's a mild warning signal, to tell you the truth," Cashin told CNBC. "When we've seen those kinds of moves before, the market has either stalled or actually pulled back somewhat. Not anything climactic, but you could be setting up for [a] 5 to 7 percent pullback."
Cashin, UBS director of floor operations at the New York Stock Exchange, said that the lows could have come from political anxiety among investors relating to Trump's recent accusation that his predecessor had his Trump Tower phones tapped during the campaign, CNBC.com explained.
"The president tweeting about the supposed wiretapping and whatnot took some of the goodwill that popped up after the speech [to Congress] last week," and replaced it with "the fear that we could go into partisan political warfare all over again," Cashin said.
"I would be a little cautious," he warned.
"It was kind of a new and demonstrably different reaction because if you recall going after the speech and into the big rally on Wednesday, the feeling was, 'Gee, maybe this administration is going to be able to get some things done,'" Cashin recalled.
(Newsmax wire services contributed to this report).
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