U.S. markets took a sharp turn lower on Thursday after a report was published that revealed the Biden administration is considering raising the capital gains tax.
The Dow lowered by 321 points, or 0.94%, while the S&P 500 and Nasdaq declined 0.94% and 0.92%, respectively.
Bloomberg says Biden is thinking of raising the top capital gains tax rate for people making higher than $1 million to around 39.6% or 43.4%. The increase would fund Biden’s American Families Plan, which is still being formed.
For economic data, jobless claims fell to a covid-era low of 547,000, better than expected. Also, existing-home sales lowered to a seven-month low as high prices and low inventory blocked transactions.
In addition to his tax announcement, Biden’s virtual conference on Thursday with 40 world leaders, including Chinese President Xi Jinping, featured him pledging to lower U.S. greenhouse gases by 52% before this decade is over.
Automakers and other carbon-heavy companies were among the firms being focused on as Biden unveils his climate actions.