– This is the script of CNBC's news report for China's CCTV on May 18, Thursday.
Welcome to CNBC Business Daily, I'm Qian Chen.
U.S. equities closed sharply lower on Wednesday as investors fretted over the latest news coming out of Washington.
The Dow Jones industrial average ended about 370 points lower. The S&P 500 dropped 1.8 percent, while the Nasdaq trumbled by 2.57 percent, down more than 158 points.
The major indexes also gave up their gains for the month. The Dow and S&P also recorded their worst day since September of last year.
Speculation about Trump's impeachment or resignation heated up after news that fired FBI Director James Comey left a memo detailing a conversation in which Trump allegedly asked him to stop his investigation of former national security advisor Michael Flynn. The market seems to be betting on the feasibility that Trump's economic plans -- tax reform, undoing Obama-era regulations on banks and healthcare and stimulus though a big boost to infrastructure spending -- might be dead in the water for some time.
[DAVID SCHIEGOLEIT, The Private Client Reserve of U.S. Bank, Senior Vice President & Managing Director of Investments] "Markets are gonna crave for stability in a situation like this. And special prosecutors, particularly a former FBI head being brought in to look into this, answers a lot of the concerns that particualy democrats had in congress. so maybe this will be a sort of pause or respite, but doesnt get rid of some of the bigger risks in the market - that is, do we now need to reprice the feasibility of tax reform and health reform as a policy."
Shares of tech companies, which are expected to benefit from Trump's tax reform, were sent lower overnight .
Apple's stock price fell by 3.36 percent, the biggest one-day drop since April 2016, while shares of Facebook, Google's parent company Alphabet, as well as Microsoft, all tumbled during the trading session on Wednesday. These tech giants have parked a big amount of cash overseas, and Trump's tax reform, especially including an attractive repatriation rate, is seen to encourage those firms to bring back cash and jobs.
Financials were the biggesst loser overnight and led the losses. Goldman Sachs tumbled by 5.27 percent while Morgan Stanly dropped by 5.56%. Meanwhile, markets were worrying that if Trump got impeached, infrastruction projects would be impacted as well. So such concerns resulted in selloffs of America steel's shares, which was down 4.65% overnight.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped more than 46 percent Wednesday.
Traditional safe havens caught a bid as the benchmark 10-year yield fell to about 2.21 percent. At the same time, gold prices surged to a two-week high, touching 1259 dollars per ounce earlier, while dollar experienced its 6th-straight-day of decline, giving up all the gains since the election day last year.
However, this correction might just be temporary, said analysts. JP Morgan told its clients on Wednesday that impeachment is "very, very unlikely," as "with the G.O.P. controlling both chambers and Trump's popularity in the party being (relatively) healthy, the political dynamics don't signal impeachment."
CNBC's Qian Chen, reporting from Singapore.