Though earnings season continued with robust profits and record-breaking beats against Wall Street expectations, news that the Biden administration is coming after the nation’s top earners put a scare into the market.
Still, a sharp drop Thursday was met with a rally Friday as investors processed the news out of Washington.
“I can’t imagine an investor earning $100,000 a year would be concerned about this, because it’s not going to affect them,” said Randy Frederick, head of trading and derivatives at Charles Schwab. “While intuitively we would think that if you tax capital gains, there will be less investors out there, but honestly, what’s the alternative to investing in the market?”
Markets will have more profit reports to digest in the week ahead.
Also, the Federal Reserve meets. The market is not expecting any changes in policy. Instead, it's waiting to see how the central bank characterizes the robust economic growth as the year has progressed.
