House Speaker Nancy Pelosi announced a formal impeachment inquiry of President Donald Trump on Tuesday evening.

The news adds another item to the list of uncertainties investors will have to worry about. So what does this mean for stocks?

“For equities, remember we’ve seen something like this twice and had two very different results,” Renaissance Macro’s Neil Dutta noted in an email. “During the [President Richard] Nixon saga, stocks were already tumbling (of course, we were going into recession) and kept falling after the formal inquiry process started. During the [President Bill] Clinton impeachment process, markets exploded to the upside as the economy boomed.”

“Perhaps these political events are eventually overwhelmed by the fundamentals?” Dutta asked rhetorically.

On one hand, the historical sample size is very small. On the other hand, you could argue that no one president is bigger than the pistons powering the economy.

The Nixon experience is notable because stocks took an unambiguous plunge. But as JPMorgan’s John Normand noted in an August 2018 note to clients: “These were extraordinary times, however, with or without domestic politics. The Bretton Woods system of fixed exchange rates was in the process of disintegrating due to US balance of payments stress and Nixon’s decision to suspend the dollar’s convertibility into gold — and devalue the currency — in 1971. Hence the dollar’s erratic swings and gold’s rally during this period. The First Oil Shock in late 1973 delivered both recession and rising inflation in 1974, and thus a stagflation-driven sell-off in Equities and Bonds.”

In other words, there were other forces moving markets.

The Clinton experience is interesting as well because the stock market got slammed before the impeachment proceedings, as Normand notes, “due the previous months’ traumas from the Asian Crisis, Russian default and LTCM collapse.” From there, investors were too busy riding up the dot-com boom to be distracted by turmoil in D.C.

Nixon resigned after the impeachment hearings began. Clinton was impeached by the House, but was later acquitted by the Senate.

The takeaway is that each instance was very different and it’s probably safe to say this time is different. But what’s clear is that over time, the stock market has ultimately reflected what’s been going on in the economy, not the White House.

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Sam Ro is managing editor at Yahoo Finance. Follow him on Twitter: @SamRo

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