Though the House of Representatives voted to impeach President Donald Trump on Wednesday night, the stock market rose to new record highs in their first session after the news, boosted by trade progress and a U.S. economy that continues to hold steady.
The Dow Jones Industrial Average and S&P 500 rose by 0.4% and 0.3%, respectively, both hitting new all-time record highs.
Since House Speaker Nancy Pelosi announced the formal impeachment inquiry on September 24, the S&P 500 has risen 7.6%, while the Dow has risen by almost 5.5%.
That’s led some to compare the current market rally to reflect the impeachment process of Bill Clinton, when stocks consistently moved higher, as opposed to Richard Nixon’s resignation, when the market crashed into recession.
But in both historical cases, it was the economy that drove the market, not political news, experts say: The drop under Nixon was to be expected, given the terrible economic situation at the time, while under Clinton, the market rallied thanks to a strong economy.
Comparisons to the rally that occurred during Clinton’s impeachment suggest that stocks could outperform throughout the Trump impeachment process, as pointed out by Edward Moya, senior market analyst at Oanda.
With the Senate widely expected to acquit Trump, “there will be no change for the markets to consider,” says Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “As a result, we would expect the impeachment to not affect markets, which will instead continue to focus on the economy, trade and corporate earnings.”
Crucial quote: “We’ll see short-term market moves on a day-to-day basis, but for now, provided no smoking gun news comes out before the Senate trial, I think the market will react as it has so far,” says Paul Hickey, cofounder at Bespoke Investment Group. READ MORE:
Trump gets impeached and the Dow is up 150 pts … HAHAHAHAHAHAHAHAHAHAHA. F THE DEMS. WALL STREET IS LAUGHING.
— Mike ‘Thomas Paine’ Moore (@Thomas1774Paine) December 19, 2019