President Donald Trump gives a thumbs up as he and HHS Secretary Tom Price walk to a House Republican closed party conference on Capitol Hill, on March 21, 2017 in Washington, DC.

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President Donald Trump gives a thumbs up as he and HHS Secretary Tom Price walk to a House Republican closed party conference on Capitol Hill, on March 21, 2017 in Washington, DC.

“Republicans could fail to enact the current [or any] version of repeal and replacement of Obamacare, but nonetheless achieve some notable measure of changes in the current tax code this year that may stimulate the economy,” she wrote.

Wall Street in general has somewhat scaled back its expectations for the tax cuts Trump promised. A recent fund managers survey from Bank of America Merrill Lynch showed that just 10 percent expect a tax bill to get through before the August congressional recess.

Goldman Sachs economist Alec Phillips said he sees the ultimate result of that package to be a corporate tax rate that gets cut to 25 percent — not the 15 percent that Trump has advocated.

But Phillips also believes the market is too worried about tax reform collapsing should the health-care effort fail.

“There is likely to be much broader support for tax cuts than there is for the health legislation,” he said in a note. “Even if the health bill fails, we would continue to believe the odds of tax legislation passing by early 2018 are high.”

As for overall market reaction, there could be some issues in the near term. Stocks saw their biggest drop of the year Tuesday on worries that the Trump agenda was in danger.

However, Peterson believes any volatility won’t last.

“Indeed, we posit that a notable retreat in financial markets on a ‘no-vote’ might provide greater incentive for Congress to accomplish tax reforms and implement some degree of infrastructure spending before calendar-year end,” she said. “If House Republicans and President Trump can rebound from the setback of an AHCA ‘no-vote’ by quickly focusing all resources on tax reform over the spring and summer months, then markets probably will be reinvigorated.”

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