There are drink recipes out there that use a meringue-powder-based foam for the desired scary effect. You could stir a modest amount of that into any punch at the last minute, and surely it would terrify your guests.
You could also fiddle with dry ice – frozen carbon-dioxide – which can often be found at companies that sell ice, gasses, or certain fuels. There is an online directory that can help you find dry ice in your area.
You would not put dry ice in your punch unless it were “food-grade,” and frankly, you would not put it in anything that kids will have access to, but you could easily have a “cauldron” or hollowed-out pumpkin near your punch as the source of the fog. If you or another responsible grown-up are doing the serving, you could put food-grade dry ice directly in the brew, as long as no fragments were served.
Dry ice creates the most fog when it is added to a hot liquid, though, so adding it to punch will not generate as much fog. The manufacturers of dry ice suggest that putting 5 pounds of dry ice in 2 to 4 gallons of hot water will produce fog for as much as a half hour. As the ice cools your hot water, it will have to be replenished to keep producing fog.
You could also rig a setup where the dry ice and hot water were in a large vessel, something like a stockpot or lobster pot, while the punch bowl was sitting on something in the pot or suspended on the rim, so the fog comes out around the edges of the punch bowl. Obviously stability would be a primary concern.
You must be careful. Dry ice must be handled with insulated gloves as it is so cold it can cause frostbite. Kids will be drawn to it, so there must be strong supervision.
Food-grade dry ice means the carbon-dioxide used is of the same quality as that used in soda fountains.