Stocks erased earlier gains to trade sharply lower after Bloomberg reported Thursday afternoon that President Joe Biden would propose increasing the capital gains tax rate on wealthy individuals.
The Dow dropped more than 250 points, or 0.7%, immediately following the report, after trading just slightly lower earlier. The S&P 500 and Nasdaq erased gains to trade at session lows.
Biden’s plan would involve increasing the capital gains tax rate on the wealthy to 39.6%, according to the report from Bloomberg citing people familiar with the matter. This would apply to those earning at least $1 million. The current base capital gains tax rate is 20%.
Earlier, in the session, stocks were little changed and struggled for direction. Stocks have churned in recent sessions as investors digested a bevy of corporate earnings results and awaited additional reports, more…