From Bespoke Investment Group’s morning commentary (also, I shot a 5 minute video on past US political turmoil and the market that I’ll be sending shortly [the YouTube upload is very slow this morning]):

The term “Watergate” has been thrown around a lot
to describe recent events. Whenever any mention of
Watergate comes up, you can forgive investors for
becoming a bit jumpy. The S&P 500 fell nearly 50%
between the week prior to the sentencing of the first
five Watergate burglars in January 1973 and
the month after the resignation of President Nixon.
Of course, it’s ludicrous to pin that whole drop on
Watergate. Inflation was making a parabolic move to
double-digits YoY as the US economy choked
on the 1973-74 oil embargo by OPEC in response to
US foreign policy supporting Israel. The economy
entered recession, and the unemployment rate
spiked as high as 9%. President Nixon had
rescinded gold convertibility of the dollar (dropping
the gold standard, back in 1971. So to
reiterate: it’s not the same, and nobody should
expect a 50% decline in the US stock market on
political headlines alone! Also, remember that back
in 1998/1999, the Clinton-Lewinsky scandal and
subsequent impeachment proceedings had little
ultimate impact on equities.

As much as we like to
focus on the day to day drama out of Washington,
the financial markets are much bigger. That hasn’t
changed with the most recent revelations, and the
tiny fraction of decline we saw last night hardly
foretells calamity ahead.

Emphasis mine…