Nixon Resignation — August 9, 1974
First presidential resignation in US history
Nixon resigned on August 9, 1974 amid Watergate. The S&P 500 was already deep in a bear market — down roughly 40% from its January 1973 peak driven by the OPEC oil embargo, stagflation, and recession. The resignation accelerated selling; the S&P fell approximately 12% in August 1974 alone. The bear bottomed at 62.28 on October 3, 1974.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
The 1973-74 bear was driven by the OPEC oil embargo, double-digit inflation, and recession. Watergate added volatility but was not the primary driver of the 48% peak-to-trough decline.
Nixon's departure did not mark a bottom. The S&P 500 dropped another 20%+ between August 9 and the October 3 trough. Removing political uncertainty did not remove economic headwinds.
Political turmoil generates anxiety but rarely drives lasting market direction. The macro cycle — oil, inflation, Fed policy — determined the trajectory.
Constitutional crises make poor allocation signals — the 1974 bear was priced off oil, inflation, and the Fed, and it kept falling after the resignation supposedly cleared the air. Keep portfolio reviews anchored to the macro cycle rather than the political news cycle.