On Thursday, April 22, US stocks posted their biggest slide since mid-March, after US President Joe Biden proposed nearly doubling the capital gains tax rate for wealthy individuals to 40%, allowing the US dollar to gain in value.
In addition, the S&P 500 declined after Bloomberg News reported on a likely proposed taxation plan for investing profits. This prompted speculation that some investors could sell assets before the interest rate is lowered. Throughout the trading session, the stock market was going down due to uncertain economic statistics and renewed concerns about the progressing coronavirus situation in some large countries.
All major sectors of the S&P 500 index have shown dramatic declines, with commodity and technology stocks as the worst performers. The shares of AT&T Inc. rose after the company posted stronger-than-expected first-quarter earnings. Thursday's data showed that US home sales had fallen to a seven-month low in March, while US jobless claims had dropped significantly last week.
"Sticker shock over some of these tax figures will be hard to shake off for some investors. Some traders are looking for an excuse to lock in profits and they might choose to use this tax story as their catalyst", OANDA's Senior Market Analyst Edward Moya said.
As a result, the S&P 500 index erased earlier gains and closed 0.9% lower.