Implications of impeachment

What can history tell us about the future?

06 Nov 2019

Key takeaways

  • In the only three cases where the House of Representatives started impeachment hearings, other factors played a bigger role in driving market returns.
  • Our analysts say that global markets react more to trade disputes, tensions in the Middle East and slowing growth than impeachment.
  • Ironically, impeachment may encourage leadership in both parties to move on other legislation, if only to show that Congress can still function. 

President Trump claims that “the markets would crash” if he were impeached, but our research partners have shown that impeachment proceedings have historically impacted markets less than geopolitical and economic conditions.

In 1973-1974, for example, the S&P 500 went down 45%—but this was mostly due to the oil embargo, military conflicts in the Middle East and a spike in inflation—as opposed to the impeachment hearings of Nixon. Patient investors then recouped their losses in 1975, when the Dow rose 38%, and kept going.

Find out how the markets fared during other impeachment inquiries and see how to invest in the current climate. Read UBS ElectionWatch: Implications of Impeachment.

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