(Bloomberg) -- U.S. stocks had their biggest slide in five weeks after President Joe Biden was said to propose almost doubling the capital-gain tax for the wealthy. The dollar advanced.
The S&P 500 turned lower after Bloomberg News reported that for those earning $1 million or more, the new top rate, coupled with an existing surtax on investment income, means that federal tax rates for rich investors could be as high as 43.4%. Speculation arose that some traders may sell shares before any change is made to capture the lower rate.
“Sticker shock over some of these tax figures will be hard to shake off for some investors,” Edward Moya, senior market analyst at Oanda, wrote in a note. “Some traders are looking for an excuse to lock in profits and they might choose to use this tax story as their catalyst.”
Equities whipsawed throughout the session amid mixed economic data and renewed concern the pandemic was worsening. All major groups in the S&P 500 fell, led by material, energy and tech shares. AT&T Inc. jumped after beating earnings estimates. Intel Corp. -- the biggest chipmaker -- slid in afterhours trading as it reported a drop in data-center revenue and a steep slump in gross profit margin.
Elsewhere, Bitcoin declined for the sixth time in seven days, extending losses after the higher capital gains proposal was revealed. Investors already face a capital-gains tax if they hold the cryptocurrency for more than a year.
Here are some key events to watch this week:
- U.S. releases new home sales data Friday.
These are some of the main moves in markets:
Stocks
- The S&P 500 fell 0.9% at 4 p.m. New York time.
- The Stoxx Europe 600 Index advanced 0.7%.
- The MSCI All-Country World Index declined 0.2%.
Currencies
- The Bloomberg Dollar Spot Index gained 0.2%.
- The euro declined 0.2% to $1.2014.
- The Japanese yen appreciated 0.1% to 107.98 per dollar.
Bonds
- The yield on 10-year Treasuries fell one basis point to 1.54%.
- Germany's 10-year yield rose one basis point to -0.25%.
- Britain's 10-year yield was unchanged at 0.74%.
Commodities
- West Texas Intermediate crude rose 0.5% to $61.66 a barrel.
- Gold fell 0.5% to $1,783.50 an ounce.
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