People around the world watched Barack Obama’s inauguration on Tuesday with anticipation and hope, but the stock market took a bleaker view, with the major U.S. indices down more than four percent, the biggest-ever inauguration day stock market decline.
The stock market has historically fallen during inaugurations. The chart below, with an average 0.55 percent decline, shows the Dow’s performance during planned inaugurations days since 1897; it does not include unplanned inaugurations after a president’s death. Republican inaugurations are in red, Democrats in blue.
Do you have an explanation for the market’s behavior? Leave your answer in the comments section.