Markets Don’t Care Who the President Is

The view from Tokyo.

Photographer: Yuya Shino/Getty Images

A few weeks before the U.S. presidential election, two economists set out to quantify the impact the winner would have on the stock market. Justin Wolfers and Eric Zitzewitz looked at the market’s reaction to the presidential debates to determine what would happen if Donald Trump were to beat Hillary Clinton.

They concluded stocks would fall sharply after a surprise Trump victory, with losses in the 8 percent to 10 percent range. While stocks briefly fell in after-hours trading the night of the election in the futures markets, they rallied more than 1 percent the day after the election from the previous day’s close. And since Trump became president, U.S. stocks are up double digits with little-to-no volatility to speak of.

Wolfers wrote a follow-up to his research paper to discuss where his prediction may have gone off the tracks: