Wall St. ends in a whiplash of red ink after news on anatomy of a Biden tax hike

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Wall St. ends in a whiplash of red ink after news on anatomy of a Biden tax hike

On Thursday, all three key indices of Wall St. had extended their recent leg of downward spiral into a third straight day in a row, as a media headline saying the Biden Administration would propose a tax hike on wealthy American individuals above 43 per cent as early as by next week, sent shockwaves into global equity markets, while market participants remained utterly cautious ahead of next week’s earnings of mega-cap tech conglomerates, which eventually had offered an excuse to jump on the bandwagon of a profit-taking sell-off wave.

Nevertheless, in the day’s steep losses in the Wall St. were almost entirely galvanized by a media headline that said the Biden Administration would announce a proposal to nearly double up taxations for the wealthy American individuals, handing out an excuse to coffer up profits in a directionless market as beforementioned.

In point of fact, a Bloomberg News report had quoted unnamed sources as saying earlier in the day that the Biden Administration would propose a tax hike to 39.6 per cent for the people earning more than $1 million while raising the marginal income tax rate to 39.6 per cent from a prior 37 per cent, leading to a slanderous sundown in the US money markets.

Nonetheless, losses were moderated after US Labour Department data had revealed that weekly initial jobless claims for state unemployment benefits fell to a 13-month low last week, pointing towards a rapidly healing US labour market.

Wall St. ebbs off after Biden proposal to hike taxation for wealthy Americans

Citing statistics, while all 11 sub-indices of S&P 500 ended up the day deep into the reds with mega-cap tech conglomerates likes of Microsoft, Apple and Tesla weighing the most on a sweeping plunge, benchmark S&P 500 closed out 0.92 per cent lower to 4,134.98 and trade-sensitive Dow dwindled 0.94 per cent to 33,815.90, while tech-heavy Nasdaq was nudged as much as 0.94 per cent to 13,818.41.

Meanwhile, as Biden’s proposal to hike taxes had little chances to pass through a deeply divided US Congress, Charles Schwab’s Randy Frederick said late in the day, “There's going to be continued positive moves throughout the remainder of the year but we are due for some sort of a pullback in the very short term. Then the dip buyers will step back in.