NEW YORK, New York - U.S. stocks tumbled on Friday following news of a new capital gains tax planned by the Biden administration.
All of the major indices shed a little under one percent of their capitalization, after being much lower earlier.
"Wall Street hit the panic button and headed for the sidelines after reports that President Biden will propose capital gains taxes as high as 43.4% for those making over $1M per year" Edward Moya, Senior Market Analyst, The Americas, at OANDA told MarketWatch Thursday.
"This will likely be the initial high ask from the Biden administration on taxes. Some traders are looking for an excuse to lock in profits and they might choose to use this tax story as their catalyst," he said.
The Dow Jones industrials dropped 321.41 points or 0.94 percent to 33,815.90.
The Standard and Poor's 500 declined 38.44 points or 0.92 percent to 4,134.98.
The Nasdaq Composite lost 131.82 points or 0.94 percent to 13,818.41.
The U.S. dollar edged higher on Thursday. The euro slimmed down to 1.2014. The British pound was sharply weaker at 1.3838. The Japanese yen was little changed at 108.01. The Swiss franc slipped to 0.9173.
The Canadian dollar eased to 1.2503. The Australian dollar wilted to 0.7708, while the New Zealand dollar declined to 0.7160.
Globally stocks did well, although that may change Friday when markets reopen on the back of the Wall Street carnage.
On Thursday in London, the FTSE 100 strengthened by 0.62 percent. The German Dax rose 0.82 percent, which in Paris, France, the CAC 40 climbed 0.91 percent.
On Asian markets, the biggest gainer was Tokyo's Nikkei 225 which surged 679.62 points or 2.38 percent to 29,188.17.
In Australia, the All Ordinaries gained 53.10 points or 0.73 percent to 7,312.00.
China's Shanghai Composite, going against the trend, fell 7.82 points or 0.23 percent to 3,465.11.
The Hang Seng in Hong Kong advanced 133.42 points or 0.47 percent to 28,755.34.