Following news that President Joe Biden is planning to propose far higher capital gains taxes for the wealthy, Wall Street sank sharply on Thursday. The Dow Jones Industrial Average fell 321.41 points to 33,815.90, or 0.92%. The blue-chip index fell 420 points at its lowest point for the day. The S&P 500 lost 0.94 percent of its earlier gains to close at 4,134.98, while the Nasdaq Composite fell 0.94 percent to 13,818.41.
Bloomberg News announced Thursday afternoon that Biden is considering raising the capital gains tax rate for rich Americans to as much as 43.4 percent. The measure would increase the capital gains tax threshold on people with $1 million or more to 39.6 percent, up from the existing rate of 20%.
- The Stoxx Europe 600 Index advanced 0.7% while the MSCI All-Country World Index declined 0.2%.
- Capital gains plan does not exempt crypto as Bitcoin fell for the sixth time in seven days, widening losses. If investors keep the cryptocurrency for longer than a year, they will be subject to capital gains tax.
- Growth stocks led the intraday downturn on Thursday, with shares of Tesla and Amazon sliding 3.3 percent and 1.6 percent, respectively, as a result of higher capital gains taxes. The iShares S&P 500 Growth ETF fell 1%, outperforming its value counterpart.
- Equifax up 15.06% to close at $221.64.
- Tractor Supply up 4.43% to close at $188.14.
- AT&T up 4.15% to close at $31.36
- Arconic up 3.67% to close at $27.43
- Danaher up 3.43% to close at $252.79
- Huntington Bancshares -6.71% to close at $14.46
- Dow down -6.01% to close at $60.92
- LyondellBasell Industries down -5.66% to close at $102.00
- Micron down -5.34% to close at $84.71.
- Nucor down -5.08.% to close at $76.11
- Long-term buyers will see a significant cost spike as a result of this tax increase. If investors believe the plan has a chance of becoming law next year, they may be expected to sell this year.
- Some analysts believe that it may be difficult to pass the bill into law in the senate.
Nairametrics advises cautious buying in this era of growing uncertainties.