A closer look at post-election stock rally
By most indications, the election of Donald Trump was expected to incite a sharp rollback in stock prices. But investor anxiety before the election was tempered by the fact that most pollsters were predicting an easy victory for Hillary Clinton. Everything changed, however, on Nov. 8, when Trump pulled off an incredible upset. What happened next surprised most everyone: The stock market ricocheted upward with a bang. The Dow rose 257 points on the day following the election, and more than 1,400 points by year’s end. But while the market’s ascent is well documented, a deeper look shows a more complex picture. A new Harvard Kennedy School (HKS) faculty research working paper reveals how speculation on the president’s future economic policies has had widely disparate impacts upon different business sectors. The paper is co-authored by Richard Zeckhauser, the Frank Plumpton Ramsey Professor of Political Economy. “The ‘Trump Rally’ isn’t that unusual: The overall...