U.S. equities closed mostly lower on Friday after the Federal Bureau of Investigation announced it is investigating new emails related to Democratic nominee Hillary Clinton.
The Dow Jones industrial average ended about 10 points lower after trading 74.71 points lower following the announcement. The index was trading about 75 points higher before the new probe was announced.
"I sit next to one of the traders here and he was telling me he'd never seen the Dow fall so quickly," said Art Hogan, chief market strategist at Wunderlich Securities. "There's a lot more to this, but we won't know how much until we get more information."
"Regardless of the fundamental news we get next week, earnings or data, this may be the story for the next 10 days," he said.
The S&P 500 closed about 0.3 percent lower, and was also trading higher before the FBI's probe was announced. The Nasdaq composite ended about half a percent, off its session lows.
"She had a pretty big lead. Now this will certainly take a chunk of that, but most investors still think she'll win on November 8," said Jeremy Klein, chief market strategist at FBN Securities.
Investors were also watching the 2,130 level on the S&P, a level pointed out by DoubleLine Capital CEO Jeffrey Gundlach last week. He said closing below that level would be concerning for the stock market. S&P closed around 2,126 on Friday.
"The market has been very sanguine in pricing in a victory for Hillary Clinton. If something happened that threatened that outcome, then that would be hurtful for the market given the uncertainty surrounding Donald Trump's fiscal policy," said Phil Orlando, chief equity strategist at Federated Investors.
Clinton's lead over Trump had narrowed even before news of the new probe had broken, according to data from RealClearPolitics.
Art Cashin, UBS director of floor operations at the NYSE, said the market fell in part "delayed reaction to oil and a little bit to the Hilary thing because that's a new surprise, you only have 11 days to go to the election. How can the FBI reopen the case and resolve the thing in 11 days? That's what the market is worried about."
"The weekend talk shows will be important. The big questions will be how can they complete an investigation in just nine days. IT certainly means that probably before the inauguration if the republicans hold the house, there will be an investigation that lasts four years," said Cashin.
U.S. Treasury yields hit their session lows following the announcement. The two-year note yield lower traded around 0.85 percent and the benchmark 10-year yield held near 1.84 percent. The benchmark yield has been rising steadily over the past three months.
Earlier, the three major indexes had drifted higher following the release of better-than-expected U.S. GDP data, while investors continued to parse through a slew of corporate earnings results.
Dow Jones industrial average intraday chart
That said, stocks have remained in a tight range over the past three months, with the S&P moving just about 1.4 percent over that time period. "What we're seeing under the hood is fewer and fewer stocks leading the market higher," said Adam Sarhan, CEO at Sarhan Capital. "When you see days like this and yesterday, ... that tells you that the sellers are still in control."
The U.S. economy grew at an annualized rate of 2.9 percent in the third quarter, the Commerce Department said. The 2.9 percent clip marked the fastest economic growth in two years.
Economists polled by Reuters had forecast GDP rising at a 2.5 percent annual rate in the third quarter.
Despite the moderation in consumer spending, the third-quarter rise in growth could help dispel any lingering fears the economy was at risk of stalling. Over the first half of the year, growth had averaged just 1.1 percent.
"The primary takeaway that I have from the GDP report is that the [Federal Reserve] is likely to continue on its policy path," said Stephen Wood, chief market strategist at Russell Investments. "Third-quarter data looks like a 'C'-to-'C plus,' which is consistent from what we've seen over the past few years."
But Federated's Orlando said the headline GDP number received an unseasonably large boost from a surge in soybeans exports to China. "If you take that out, I'd say GDP is closer to 2 percent," he said.
The Fed is scheduled to meet next week and keep monetary policy unchanged. That said, investors see a December move in the cards. Market expectations for an interest rate increase in December remained unchanged at 73 percent following the GDP's release, according to Jefferies. Other data released Friday included the final read on consumer sentiment for October, which missed expectations.
"The 4 quarter average growth run rate is now exactly at 1.5% and Q3 was saved by a big boost in exports and agricultural exports within that. Personal spending is at a 2.5% average run rate over the past 4 quarters while capital spending remains punk," said Peter Boockvar, chief market analyst at The Lindsey Group.
The dollar held lower against a basket of currencies, with the euro near $1.098 and the yen around 104.7. "The initial move on the dollar was to the upside. ... Since then, it's moved slightly lower. Part of it has to do with personal consumption coming in about half a percent below consensus. That took a bit of wind out of the sales of the dollar," said Minh Trang, senior FX trader at Silicon Valley Bank.
Meanwhile, the corporate earnings season continued on Friday, with energy giants Chevron and ExxonMobil both posting mixed quarterly results. Other firms that reported on Friday include AbbVie, Hershey and Goodyear Tire.
On Thursday afternoon, Amazon posted mixed quarterly results, with sales eking above consensus and profits falling well short of estimates. At the close on Friday, Amazon shares were down about 5.2 percent. Companies scheduled to report quarterly results include Kellogg, Pfizer, Gilead Sciences, Herbalife and Alibaba.
Overseas, European equities slipped, with the pan-European Stoxx 600 index slipping 0.27 percent. In Asia, stocks closed mixed.
The dropped 6.63 points, or 0.31 percent, to end at 2,126.41, with health care leading six sectors lower and industrials the top advancer.
The Nasdaq slipped 25.87 points, or 0.5 percent, to close at 5,190.1.
About nine stocks declined for every five stocks at the New York Stock Exchange, with an exchange volume of 954.2 million and a composite volume of 3.939 billion at the close.
High-frequency trading accounted for 52 percent of October's daily trading volume of about 6.28 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded about 5 percent higher, near 16.1.
—Reuters contributed to this report.