US futures edge up but Biden’s tax proposals dent investor sentiment and hit cryptocurrencies

US futures edge up but Biden’s tax proposals dent investor sentiment and hit cryptocurrencies

US futures edged up on Friday, regaining some stability, after President Joe Biden proposed a sharp increase in capital gains tax for the wealthiest Americans, which hit investor sentiment and triggered a sell-off in cryptocurrencies.

Stock-index futures largely shook off any overnight weakness, but the mood remained cautious. Dow Jones futures rose by 0.2%, whilst S&P 500 futures gained 0.24% and Nasdaq 100 futures inched 0.18% higher.

The tax announcement affected the already shaky markets recovery, Michael Hewson, chief market analyst at CMC Markets, said.

"While one could argue that the prospect of higher taxes is never welcome, and a doubling of a key tax rate even more so, the likelihood of anything of this nature passing through an evenly split Congress, lies somewhere between slim and none, however in these highly uncertainty times it doesn't take much to spook a little bit of profit taking, in what has already been a very choppy week. The reality is taxes may rise but certainly not by as much being touted," Hewson said.

"The turn in sentiment was seen in yields as well, with 10-year US Treasuries higher on the day, as yields fell -1.7bps to 1.538% after been as high as 1.5856% before the news",