NEW YORK (NewsNation Now) — Stocks turned lower Thursday following reports President Joe Biden will propose a hefty tax increase on the gains wealthy individuals reap from investments.

Biden’s proposal would raise the marginal income tax rate to 39.6% from 37% and nearly double capital gains taxes to 39.6% for people earning more than $1 million, sources told Reuters, to go towards $1 trillion in spending on child care, universal pre-kindergarten education and paid leave for workers.

White House Press Secretary Jen Psaki said Biden would discuss his “American Families Plan” during an address to Congress next week.

The three main indexes on Wall Street were trending slightly lower when Bloomberg reported Biden’s plans, which some analysts said would be hard to pass in Congress.

The selling was widespread, with every sector in the S&P 500 lower. Technology stocks, banks and companies that rely on consumer spending, accounted for much of the decline. Treasury yields held steady.

The S&P 500 was down 0.8% as of 2:35 p.m. Eastern, having shed an earlier gain. The Dow Jones Industrial Average fell 302 points, or 0.9%, to 33,829. The Nasdaq was 0.8% lower. The S&P 500 closed higher Wednesday, ending a two-day slide, but it’s still down for the week.

Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago, said when a proposal is floated about raising taxes or capital gains, everybody gets excited, sells first and asks questions later.

“It is more of a short-term, knee-jerk reaction,” he said.

Stocks have rallied in recent weeks amid a string of encouraging reports on hiring, retail sales and other economic data.

COVID-19 vaccinations and massive support from the U.S. government and Federal Reserve are fueling expectations for solid corporate profit growth as more businesses reopen after being forced to close or operate on a limited basis due to the pandemic.

The Associated Press and Reuters contributed to this report.