During Watergate and the lengthy process of getting Richard Nixon to resign, political instability weighed all sorts of havoc on the US economy with the S&P 500 falling from a high of 142, when Nixon assumed his second term in January 1974, to a low of 86 just after his August 9, 1974 resignation.
Watergate involved a crime and a tremendous breech of the public’s trust, and a significant erosion of the business climate and market values.
As difficult as Watergate was for the US, it did not involve the election of a President with significant psychological and intellectual shortcomings. It did not involve those shortcomings enabling the White House to be controlled by an adverse power controlled by a despot trying to reassert his country’s power worldwide. It did not involve a Republican Congress so subservient to a President that all checks and balances inherent in the government needed to be quickly reestablished and strengthened, at the public’s insistence, for impeachment proceedings to begin.
The US likely faces a difficult and uncertain next couple of years as the entire process around Trump, and the 2016 Russia-backed coup d’etat, is sorted out. History shows us that the stock market is unlikely to escape these challenges ahead without real damage.