The Cost of Kamala: Stocks Plunge After Presidential Debate and Higher Core Inflation

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Investors on Wednesday appeared to reassess the risks that Kamala Harris could win the presidential contest, sending the major stock indexes plunging on the morning after the debate between Harris and Donald Trump.

Harris has said she would seek to hike a broad range of taxes, including taxes on corporate profits, unrealized capital gains, and the incomes of wealthier Americans. Many investors and Wall Street analysts think these taxes would weigh heavily on stocks. The inflation report has forced traders to rethink how far the Fed will go when it cuts interest rates next week and in the months to come. The market had been expecting even odds that the Fed would announce a cut of 50 basis points or 25 basis points. After the inflation report, the odds of a larger cut sank significantly.

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