Stocks are falling after Bloomberg reported President Biden will propose a capital gains tax as high as 43.4% for the wealthy. Yahoo Finance's Jared Blikre joins Kristin Myers and Alexis Christoforous to break it down.

Video Transcript

ALEXIS CHRISTOFOROUS: And if you blinked, you missed it. The stock market has taken an abrupt turn for the worse. All three major indexes at their worst levels of the session right now, with the Dow Industrials off more than 200 points. The catalyst here, some news coming out of the White House that President Biden is going to announce some tax initiatives for the rich. Jared Blikre here now with the breakdown. What do you know, Jared?

JARED BLIKRE: That's right. For earners of over $1 million a year-- so we can safely classify those people as rich-- President Biden is proposing that they be taxed on capital gains. That's when you buy or sell a stock, for instance, and you book profits on it at 43.4%. And you can see the reaction in the Dow there. This is a move of about 250 points. You can see, the Dow is only down just a bit over half of a percent here. So it's not the biggest movement, but it looks very dramatic on the screen.

So let's take a look at some of the other markets here. I got the 10-year T-note yield. This really didn't move that much. We're just talking about a fraction of a basis point right here. And then if we look at the currency markets, for instance, the euro today, you can see right around here really not that much movement that we're seeing just yet.

So let's take a look then at some of the other markets that we're tracking today, as I go through some of the details. So for New Yorkers, the combined state and federal capital gains rate could be high as 52%. For Californians, it could be as high as 56.7%. Now we already saw a lot of these stocks in the red, not necessarily before this move having anything to do with it. But I would point out that stocks have been slightly under pressure. We've been seeing some of the more defensive sectors like staples and also healthcare and utilities and real estate.

And you can see here-- let's take a look at utilities. On an intraday basis, we did see utilities fall off as well. So, really hitting all the sectors, but you've got to imagine going forward that there is going to be a lot of eyeballs on this because 56%, 57%, that's real money, guys.

ALEXIS CHRISTOFOROUS: That is real money. It is whopping. And as you can see, a very aggressive response there from investors. All right, we'll be keeping an eye on it. Thanks a lot, Jared.