U.S stocks reversed lower in a swift fashion on Thursday after reports that President Joe Biden is slated to propose much higher capital gains taxes for the rich.
The Dow Jones Industrials tumbled 321.41 points to conclude Thursday at 33,815.90
The S&P 500 scaled back 38.44 points to 4,134.98.
The NASDAQ Composite dropped 131.8 points to 13,818.41.
Bloomberg News reported Thursday afternoon that Biden is planning a capital gains tax hike to as high as 43.4% for wealthy Americans. The proposal would hike the capital gains rate to 39.6% for those earning $1 million or more, up from 20% currently, according to Bloomberg News, citing people familiar with the matter.
Reuters and the New York Times later matched the headlines.
Also on Thursday, the Republican party set forth its counteroffer to Biden’s $2-trillion infrastructure plan. The senators proposed a $568-billion framework that includes funding for bridges, airports, roads and water storage. It does not include tax increases.
Shares of Southwest Airlines rolled over and fell 1.6% despite the carrier saying leisure travel bookings continue to rise and that it expects to break even “or better” by June. Southwest also posted a narrower-than-expected loss for the first quarter.
Dow Inc. slumped 6% even after the chemicals company topped earnings and revenue estimates for the first quarter. The stock is still up almost 10% for 2021.
The market remained lower after a better-than-expected reading on weekly jobless claims. The U.S. Labor Department said Thursday that first-time claims for unemployment insurance totaled 547,000, which was below the Dow Jones estimate for 603,000.
So far, companies have largely topped Wall Street expectations this earnings season, but strong first-quarter results are not lifting the market higher after a run to records pushed valuations near multiyear highs.
Prices for 10-Year Treasurys regained strength, lowering yields to 1.54% from Wednesday’s 1.56%. Treasury prices and yields move in opposite directions.
Oil prices regained 29 cents to $61.64 U.S. a barrel. Gold prices retreated $8.60 to $1,784.50 U.S. an ounce.