The price of S. & P. 500 futures shot upward as Donald Trump began to unravel during the first Presidential debate, on September 26th. Photograph by Win McNamee / Getty

On September 26th, at 9 P.M., Hillary Clinton and Donald Trump walked onto the stage at Hofstra University, in Hempstead, Long Island, for the first of three scheduled debates. That day was Clinton’s polling nadir. She had fallen, precipitously, from a nearly ninety per cent lock, as predicted by FiveThirtyEight, to a less than fifty-five per cent chance of winning the Presidency. Trump had the momentum. A cough or a slip—of the tongue or the foot—might have done Clinton in, and more than eighty million viewers, eager to see what would happen in this most unpredictable of elections, tuned in for the most-watched Presidential debate in history.

As it happens, that evening offered something of a perfect natural experiment into how the people who manage the world’s money view the two candidates. The economists Justin Wolfers and Eric Zitzewitz studied how investors around the world reacted, moment by moment, during a debate in which Trump came out strong and then collapsed. The results were clear: investors believe that Trump would make us considerably poorer and fill our lives with far more risk.

In general, you should be skeptical of pundits who try to explain how “the market” reacts to some event or other. Statements on the news like “The Dow Jones Industrial Average fell two per cent today in late trading because of rising concerns about a decrease in factory orders” are pretty much meaningless. Many investors are making billions of decisions for many different reasons, which means it’s often impossible to tease out some explanatory narrative from the mess of data (though reporters certainly try).

There are rare moments, though, when the reasons for market movements can be teased out. Wolfers and Zitzewitz realized that the September 26th debate was one of them. The time of the debate, 9 P.M. to 10:30 P.M., Eastern Daylight Time, is about as quiet as global financial markets ever get, with stock markets closed in the U.S. and Europe and not yet open in much of Asia. This means that the chaotic screaming that drowns out analysis during trading hours has quieted to a gentle hum of those few people still sitting at their computers buying and selling stocks, bonds, and currencies. What trading does occur is more likely to be a result of a specific, identifiable event.

Wolfers, of the University of Michigan, and Zitzewitz, from Dartmouth, have worked together for more than a decade building a model to understand what financial-market movements can tell us about the economic impact of specific events. Neither of them is especially interested in the value of stocks and other financial products; they want to understand how the economy will function, over all, for everybody. But the stock and currency markets can be helpful. Unlike polls and surveys, these markets are continuous and require participants to put their money at risk.

During the debate, Wolfers and Zitzewitz found particular clarity in the trading of S. & P. 500 futures, which are bets on how the stock market will perform in the future, a helpful guide to relative optimism or pessimism. The price of these futures fell right before the debate began—when Trump’s poll numbers were surging—a sign, it seems, that traders believed a Trump victory would lower the value of their stocks. Those futures stayed put as the debate began. The market was holding its breath during those first moments when Trump seemed to be unusually focussed and cogent. Soon, however, Trump began to unravel, Clinton was literally dancing with glee, and the price of S. & P. 500 futures shot upward. It rose in steps. Trump admitted to not paying taxes and, boom, the price of futures rose. Trump garbled an answer about cyber security (in which he referred to “the cyber” and his ten-year-old son) and the futures rose, again. In total, over the course of the debate, the price of the futures rose 0.71 per cent, which, in the market, is an enormous increase in so short a period of time. (It was only matched once in recent memory, on the downside, during the disastrous “flash crash” of 2010.) Investors were betting Trump’s chances of being elected had fallen significantly, and that prediction gave them hope for their investments.

Wolfers and Zitzewitz found similarly large moves in several other global markets. Mexican peso futures, a bet on the economic health of that nation, gained two per cent in value; U.S. Treasury bonds fell in price, which is a sign of greater confidence in the U.S. government; futures bets on the stock markets of the U.K., Australia, Hong Kong, Japan, Korea, and Singapore all rose in lockstep. One of the most interesting findings was a study of the VIX futures, an index designed to measure how much uncertainty and volatility investors expect to see in the coming months. Sure enough, as Trump’s performance collapsed, those markets priced in far more stability.

Over all, the analysis by Wolfers and Zitzewitz suggested that if Clinton wins the election, stock-market value in the U.S. and around the world would be more than ten per cent higher than it would be in a Trump Presidency. This is unusual in at least two ways. There is a larger-than-usual disparity between the market’s sentiment toward the two candidates, and this is the first time in memory that the markets seemed to prefer the Democratic Party candidate. (Wolfers is a Democrat, and his partner, Betsey Stevenson, served on President Obama’s Council of Economic Advisers.)

In the first Presidential debate of 2012, for example, when Mitt Romney had a strong debate, investors were thrilled, and sent S. & P. 500 futures considerably higher. On the evening of the election, when Obama was declared the winner, S. & P. 500 futures fell sharply. That is the typical pattern. Republicans usually promise the sorts of policies that investors like: tax cuts for wealthy people, more employer-friendly rules, and less regulation, the sorts of things that could increase corporate profits and, therefore, stock value. It’s important to note that optimism about the stock market doesn’t necessarily translate into over-all economic growth or the well-being of all. The stock market might rise because companies find it easier and cheaper to pollute, fire workers, and avoid paying taxes—though all of those might be disastrous for the rest of the country.

Trump has promised American business much of what it wants. He has proposed tax cuts that would, effectively, give trillions of dollars to the rich, an elimination of the Dodd-Frank legislation enacted to regulate Wall Street after the financial crisis, and a severe curtailing of environmental rules. That the markets seem fearful of a Trump Presidency suggests that investors—who trade for profit, not to express political views—believe Trump would so devastate commerce in other ways as to more than erase the gains of whatever pro-corporate policies he would enact.

These results do not imply that the markets love Clinton, who is proposing increased taxes on the wealthy and an expansion of Wall Street regulations. Wolfers told me it’s more a sign that they hate her less than they hate Trump. What, precisely, do the markets fear about Trump? His anti-trade rhetoric is certainly troubling to those who care about stock and currency value; less trade would hurt profits for multinational companies and the currencies of our leading trading partners. Wolfers says that trade is not enough to explain the magnitude of the expected loss of value under a Trump Administration, nor can it explain the increase in uncertainty. He says that the markets express a feeling that so many others have: we have no idea what Trump could do with all the power of the Presidency, but whatever it is it wouldn’t be good.