US President Donald J. Trump listens to remarks from President Erdogan (not pictured) during a joint statement in the Roosevelt Room of the White House in Washington, DC, USA, 16 May 2017.Turkish President Recep Tayyip Erdogan visit to Washington DC, USA - 16 May 2017Trump and Erdogan face the issue of working out cooperation in the fight against terrorism as Turkey objects to the US arming of Kurdish forces in Syria.

Retail continued to bounce along the bottom of the stock market Wednesday as the rest of Wall Street came down from a high.

Investors took a step back to ponder whether President Donald Trump will be able to push through any of his pro-business agenda while fighting off a political firestorm one angry tweet after another.

The Dow Jones Industrial Average, trading near its all-time high, retreated 372.82 points, or 1.8 percent, for the day to 20,606.93. Retail fell further down into the dumps with a host of fashion players setting new 52-week lows, including Urban Outfitters Inc., which ended down 4.2 percent to $19.60; Express Inc., 3.3 percent to $7.67; Guess Inc., 2 percent to $9.81; Lululemon Athletica Inc., 1.8 percent to $49.14; Ralph Lauren Corp., 1.6 percent to $72.75; Ascena Retail Group Inc., 1.7 percent to $2.82, and Fossil Group Inc. 0.6 percent to $12.48.

The steepest retail decliner of the day was American Eagle Outfitters, which turned in lower first-quarter profits, and saw its stock fall 14.7 percent to $11.05.

Traders have been betting Trump’s business background combined with a Republican-led House and Senate would lead to a suite of oft-promised tax reforms. But the White House has become increasingly bogged down with allegations that the President sought to interfere with investigations into his campaign’s ties with Russia. He is also being criticized for his handling of classified information, having reportedly passed on highly sensitive intelligence from Israel to Russian officials in an Oval Office meeting.

The controversy has taken center stage, pushing Trump’s tax reforms, his efforts to repeal and replace Obamacare and a host of other policy plans to the sidelines.

Retailers have been watching anxiously to see if the changes include a border adjustability tax, which could add to retail costs given its treatment of foreign-made goods, and whether existing trade deals hold steady.

But mostly the sector has been focused on more immediate concerns.

Consumers simply aren’t buying into fashion the way they once did. And stores from J.C. Penney Co. Inc. to Urban Outfitters have been beset by weak first-quarter results, continuing drops in mall traffic and worries that Amazon, after years of gaining steam, is finally starting to reshape the landscape in a major way.

If the broader stock market gives way, Cowen analyst Oliver Chen said retail stocks, particularly on the high end, could suffer as high-end consumers see their brokerage accounts dwindle.

“If consumers feel they have a strong need to increase their savings rates, that will be negative,” said Chen, who also said heath-care costs were a key variable for spending.

Consumers have the power to spend, as evidenced by the continued gains seen in the off-price sector and in Amazon’s steady climb, but many retailers are missing out.

“There’s a revolution happening,” Chen said, pointing to market share shifts.

“There’s a difference between a good company versus a good stock versus a good economy,” he said. “Generally speaking, if you’re a great management team, the test is now for leadership because you’re having to rapidly change your business under new variables. Are you up to the challenge?”

Chen said the fashion and retail companies that could answer ‘yes’ included offpricers TJX Cos. Inc. and Ross Stores Inc., the brand-focused LVMH Moët Hennessy Louis Vuitton, the innovative Lululemon Athletica Inc. and Ulta Beauty, which he said could become the Amazon of beauty.

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Retail’s Safe Haven: TJX and Off-price

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J.C. Penney Sees Wider Loss as Apparel Struggles

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