Shares in Caterpillar and other stocks exposed to the construction industry were under pressure.
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Congress delayed a vote on the $1 trillion infrastructure bill late Thursday night amid intra-party negotiations among Democrats, putting the future of a cornerstone of President Joe Biden’s economic plan in limbo.
Speaker Nancy Pelosi plans to try again for a vote Friday.
The debate among Congressional Democrats centered on a second part of Biden’s agenda—a hallmark $3.5 trillion budget reconciliation package addressing the U.S. social safety net and climate change initiatives.
“The issue is that some of the more progressive members among the House Democrats don’t want to vote for [the $1 trillion bill] without the larger reconciliation package, which contains much of Biden’s agenda on social programs,” said Jim Reid, a strategist at Deutsche Bank.
The $1 trillion infrastructure bill calls for $550 billion in new spending over the next five years alongside $450 billion in already-approved funds as part of an ambitious project to modernize roads, bridges, water systems, telecommunications, and the electric grid.
The bill would see a windfall of cash—$110 billion—headed for roads and bridges, with $66 billion set aside for rail, $55 billion for water and wastewater projects, and $39 billion for public transit. The first national network of electric vehicle charging stations, as well as airports and ports, are also included.
With the vote delayed, here are the stocks to watch:
Vulcan Materials (VMC), a major producer of construction materials like gravel and sand, fell 2.7% Thursday.
Steel giant Nucor (NUE) fell 1.3% Thursday and the shares were down a further 1% in the U.S. premarket Friday.
Equipment rental group United Rentals (URI) fell 3.1% Thursday.
Electric vehicle infrastructure company ChargePoint (CHPT) slipped 2.2% Thursday with the shares down 1.4% in the Friday premarket.
Manufacturers of heavy machinery, Deere (DE) fell 4.5% Thursday with Caterpillar (CAT) down 3%. Both stocks were less than 1% lower before trading began Friday.
The infrastructure bill includes a provision to raise $28 million from the crypto asset industry to help pay for spending—so its delay was a boost to crypto exchange Coinbase (COIN), which rose 1% Thursday and was up 0.6% in the premarket.
Exchange-traded funds exposed to infrastructure, like Global X U.S. Infrastructure Development ETF (PAVE) and iShares U.S. Infrastructure ETF (IFRA), fell Thursday. PAVE slipped 2.2% and IFRA was down 1.5%.
Write to Jack Denton at [email protected]
