U.S. equities trading turned sour on Wednesday despite better than expected earnings from the broad majority of S&P 500 companies. The new concern comes from Capital Hill in the form of possible tax increases on the wealthy. The latest proposal to hit the table isn?t new but it is controversial. Democrats want to tax unrealized gains on stocks and other assets effectively creating an annual must-sell environment for investors.

As dark as the tax cloud is, the real risk for the market is still tomorrow?s PCE price index. The market is still expecting PCE prices to moderate on a month-to-month basis even though the constant among earnings reports is higher prices. If the PCE price index comes in much hotter than expected it would reaffirm the need for higher interest rates and possibly put an end to the stock market rally.