This Thursday, Wall Street shares closed in the red. The Dow Jones dropped by 0.94%. It was a result of an announcement that Joe Biden, the United States president, proposes a tax increase on large capital gains.
At the close of the NYSE session, the Dow Jones yielded 321.41 points to 33,815.90; and the S&P 500 slipped by 0.92% or 38.44 4,134.98.
The Nasdaq composite index, which brings together the most important technology companies in the market, lost 0.94% or 131.80 points to 13,818.41 units.
According to press releases, the president is preparing to present the American Families Plan to Congress next week. Although it is subject to change, it could include tax increases for profits from asset sales, which has not been liked in the markets.
After opening in the red, the New York stock market was entering positive territory in the middle of the session when it experienced a sharp fall. The increases were hindered because this tax increase would stand at 39.6% for those entering more than a million dollars when the rate is currently 20%.
Jack Ablin of Cresset Capital Management stated that Biden’s proposal effectively doubles the capital gains tax for million-dollar earners. It’s a significant cost increase for long-term investors.
The VIX index, which measures volatility in the market, soared 8% after those reports.
Wall Street is going through a rough week
All sectors ended in red, and the most affected were basic materials, energy, and technology.
Among other news of the day, applications for unemployment benefits in the US continued to decline last week, to 547,000. They were at their lowest level since mid-March last year.
Wall Street is going through a rough week also marked by the quarterly results. Among them the communications group AT&T with a decrease of 4.15% and Dow Inc, which yielded 6%. The latter firm led the declines among the 30 listed on the Dow Jones, followed by Walgreens, JPMorgan, and Intel.
The most notable gains were for Salesforce, which hiked by 0.34%, and McDonald’s, with an increase of 0.30%.
In other markets, Texas oil advanced to $61.43 per barrel, and at the close of Wall Street. The yield on the 10-year Treasury bond slipped by 1.545%. As for gold, the yellow metal fell to $1,784.50 per ounce. The dollar rose against major currencies on Thursday, followed by a series of positive economic news.
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