How Donald Trump Moved the Market Last Month

By Steve Symington, Brian Stoffel, and Brian Feroldi Markets Fool.com

For better or worse, the decisions of President Donald Trump and his administration have an outsize influence on the stock market. After all, the president is in a unique position to dictate policies, regulations, and legislation with far-reaching effects on virtually every industry in the world.

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But it's admittedly difficult to keep up with the various executive actions in these early months of Trump's presidency. So to help keep things in perspective, we asked three top Motley Fool contributors to discuss one way Donald Trump moved the market in March. Read on to learn how Trump affected for-profit education, healthcare, and financial stocks last month.

IMAGE SOURCE: GETTY IMAGES.

An industry hoping to escape regulatory scrutiny

Brian Stoffel: When the Obama administration came into power, for-profit colleges and universities were riding high. Thanks in part to the Great Recession, enrollments were booming, and four of the more notable players -- Apollo (former parent to the University of Phoenix), Strayer (NASDAQ: STRA), Grand Canyon (NASDAQ: LOPE), and DeVry (NYSE: DV) had combined market caps of over $19 billion.

By the time last November's election rolled around, Apollo had agreed to be taken private, and the combined value of the four had dropped almost 75%. But with the election of Donald Trump, hope sprang eternal. In the belief that a Republican in office would mean less regulatory oversight, shares of the remaining three have advanced an average of 66%since the November election.

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March was no exception to the upward trend.

STRA data by YCharts.

Of course, we can't look to the Trump presidency as the sole cause for the jump. But I would argue that one piece of news helped a great deal. In mid-March, the Department of Education announcedthat it would be delaying the enforcement of the previous administration's gainful-employment rule, which would have required schools to show that their graduates were benefiting from their education.

Failure to meet certain benchmarks could have led to a loss of federal funding, which accounts for the lion's share of revenue at almost all publicly traded, for-profit colleges and universities.

Healthcare stocks go on a wild ride

Brian Feroldi:One of President Trump's biggest campaign pledges was to "repeal and replace" the Affordable Care Act, which is more commonly known as Obamacare. Earlier last month, President Trump introduced his own plan called the American Health Health Care Act (AHCA).

After the bill was announced, the nonpartisan Congressional Budget Office did an analysis and concluded that 14 million Americans would lose health insurance by 2018. Understandably, these figures drew a lot of media attention that would make it hard for the bill to sail through congress.

If you've been following the news, you already know what happened next. The bill was pulled from the House after it became clear that it wouldn't garner enough votes to pass.

Predictably, many stocks from the healthcare sector reacted strongly to the month's news. Hospital stocks such as HCA Holdings and Medicaid insurers like Molina Healthcare all tanked when the details of the AHCA were released at the beginning of the month. That move makes sense as a rising uninsured rate would likely increase hospital write-offs from treating uninsured patients and it would also limit future Medicaid enrollment. However, shares of both companies rallied after news broke that the bill was going to be pulled.

MOH data by YCharts.

It is still anyone's guess as to what the future holds for healthcare in this country as President Trump appears to be committed to making some sort of change. That means that healthcare investors should be bracing themselves for more volatility ahead.

A confidence-killer for financials

Steve Symington:Financial stocks have skyrocketed since last November's election, with theFinancial Select Sector SPDR(NYSEMKT: XLF)ETF that tracks the segment up more than 23% over the past six months. The move notably came as investors in the sector bet that banks would benefit from a combination of weaker regulations, tax reform, and pro-growth infrastructure-spending plans proposed by Trump's administration.

But the XLF also endured a sharp pullback last month, including a nearly 3% decline on March 21 as banks and other financials stocks led the overall market'sworst single-day dropin over six months. For perspective, that's when it became apparent thatRepublicans' healthcare reform bill -- which Brian F. already discussed above -- was facing significant legislative challenges. In short, when those challenges culminated in Republicans abandoning the bill after they failed to garner enough support for it to pass a key House vote, the so-called "Trump trade" in financials began to unravel as investors doubted whether Trump would be able to follow through on his campaign promises in a timely fashion.

To be fair -- and though Trump initially threatened to leave current policies in place if he couldn't pass his bill -- he has since reiterated his promise to repeal and replace Obamacare. But the longer it takes for him to do so, the less confident investors will be in betting on the success of his future endeavors.

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Brian Feroldi has no position in any stocks mentioned. Brian Stoffel has no position in any stocks mentioned. Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.