A federal judge in the District of Columbia on Tuesday afternoon temporarily blocked an executive order given by President Donald Trump that imposed a freeze of all federal grants and loans, putting $3 trillion in funding in jeopardy and entire industries on edge.
The Details: According to a New York Times report, Judge Loren AliKhan blocked the order late Tuesday afternoon in response to a lawsuit filed by Democracy Forward. The lawsuit argued the directive violated the First Amendment and the Administrative Procedures Act governing the issuance of executive orders.
Judge AliKhan said she will issue a more permanent decision on Feb. 3
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Skye Perryman, Democracy Forward's president and chief executive, commented on the judge's decision in a statement.
"We are grateful for this administrative stay to allow our clients time to sort through the chaos created by the Trump administration's hasty and ill-advised actions," Perryman said, per the New York Times.
Trump's directive, issued Monday by the Office of Management and Budget, required federal agencies to halt disbursements while programs were reviewed for alignment with Trump administration policies and was slated to go into effect on Tuesday at 5 p.m. ET.
But, early Tuesday, state Medicaid programs reported the federal reimbursement portals had been locked. State officials said funding for community health centers, food for families, housing assistance, preschools and disaster relief was in limbo.
According to the New York Times, the White House and OMB said on Tuesday afternoon the funding freeze did "not apply across-the-board" and affected programs on D.E.I. efforts and funding for organizations "that undermine the national interest."
Stocks To Watch: It remains unclear exactly which industries could be affected by Trump's order or if the judge will elect to block it permanently on Feb 3.
However, Medicaid funding had reportedly been stopped at least temporarily. HCA Healthcare Inc. (NYSE:HCA) and Universal Health Services Inc. (NYSE:UHS) stocks fell on Tuesday.
Large defense contractors like RTX Corp. (NYSE:RTX) and Lockheed Martin Corp. (NYSE:LMT) also face a growing degree of uncertainty regarding government funding and contracts.
Green industries including solar energy could also be on the chopping block for federal funding due to Trump administration policies. Sunnova Energy International Inc. (NYSE:NOVA) dropped 12% Tuesday and Sunrun, Inc. (NASDAQ:RUN) fell 9.2% amid the uncertainty on future policy changes.
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