U.S. markets will see substantial sell-offs if Democrats win the presidency and regain control of the Senate in this fall's election, Fox Business Network senior correspondent Charlie Gasparino told "Your World" on Monday.
"If you look at [Democratic nominee] Joe Biden's tax plan, yes, most of it aims at people making $400,000 a year," Gasparino told host Neil Cavuto. "But guess what? People who make $300,000 a year buy stocks, and he wants to raise capital gains taxes. He would hurt the market.
"I think the real question with Biden, if he gets elected, and the Republicans keep the Senate, I don't think you're going to see a massive sell-off," Gasparino continued. "But if Biden gets elected and the Democrats take the Senate, you're going to have to start rejiggering your portfolios. You're going to have to sell some stocks. You're going to have to do things, and that will tank the markets. I think that's almost a given in the short run."
"That doesn't mean that the markets won't come back," he added. "Obviously, the economy could improve, we can get out of the pandemic, all that positive stuff could help the markets. But man, let me tell you something, [if] he gets elected with Democrats in the Senate, there's going to be some selling going on."
Gasparino's prediction came after the closing bell on a day which saw the Dow Jones, S&P 500, and Nasdaq making substantial gains on apparent progress in the search for coronavirus treatments. On Sunday, Trump announced the Food and Drug Administration had issued an emergency authorization for a COVID-19 treatment utilizing convalescent plasma.
The S&P 500 rallied 34.12, or 1%, to 3,431.28 and added to the all-time high it set last week, when it erased the last of its losses from the coronavirus pandemic.
On the opening day of the Republican National Convention, Gasparino argued that Trump was on strongest ground arguing that without his leadership, America's recent economic gains would be reversed.
"Donald Trump has said verbally, made some obviously incorrect statements regarding the coronavirus — when it was going to end, how it was going to end, his support of hydroxychloroquine is questionable," he said.
"On the economic policy, his administration has done a great job. I mean, they did the exact opposite of what Herbert Hoover and Franklin Roosevelt did before the Great Depression — [or] that led to the Great Depression. He put immense pressure on Jerome Powell, the Fed chairman, to cut rates. He stimulated the economy. He tried to cut taxes. I mean, he did everything that he was supposed to do economically, and the country has benefited from this mightily. He's on very strong grounds economically."
The Associated Press contributed to this report.