It's a classic flight to safety bet.
The Standard & Poor's 500 index had its biggest drop since September, sliding 43.64 points, or 1.8%, to 2,357.03.
At 1100 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.5%, while Nasdaq futures were off 0.4%. The Nasdaq fell 158 points, or 2.6 percent, to 6,011, a day after its latest record high.
But shares in Cisco fell more than 8% after it forecast weaker-than-expected quarterly revenues and said it would cut an additional 1,100 jobs. The Russell 2000 index sank 38 points, or 2.8 percent, to 1,355.
Bank stocks, which outperformed in the post-election rally, were the worst hit. Secondly, and more drastically, it could actually lead to the impeachment of the sentient Wotsit, an eventuality that would completely erase the foundations of the market's recent record highs. The S&P 500 financial sector tumbled 3 percent.
USA stock futures were off 0.5 per cent, though they were still close to record highs.
Bond prices rose sharply.
The losses followed reports that Trump asked former Federal Bureau of Investigation chief James Comey to stop a probe into ex-national security advisor Michael Flynn over his contacts with Russian Federation - a request which commentators said could amount to obstruction of justice.
-Crude futures added 1.25 percent, reversing an earlier 1.3 percent loss, with gains accelerating after the release of us government data on inventories.
"The Trump economic programme is either going to be delayed by this turn of events or possibly be derailed, that's why investors are acting the way they are". Gold prices surged amid a mad dash to "safety", and the dollar plummeted, while the CBOE Volatility Index (VIX) - or the market's " fear gauge " - saw its largest single-day rise since the Brexit backlash in June.
Bank stocks, which outperformed in the post-election rally, were the worst hit on Wednesday.
BANKS SLIDE: Several financial companies fell sharply as bond yields declined, which will mean lower interest rates on loans. The S&P 500 is still up over 5 percent for the year.
Unease over the potential implications of the latest political fallout in Washington weighed on the dollar on Wednesday.
The euro also caught a bid, pushing the currency to its highest against the dollar since before the U.S. presidential election. Against the yen, the dollar was down to 111.09 yen from 113.03.
Brent crude gained 1.1 percent to settle at $52.21 per barrel, while US light crude rose 0.8 percent to settle at $49.07. Numerous trades sparked by the president's shock election have reversed in recent days, with the dollar all but erasing its post-election rally. Wholesale gasoline was little changed at $1.60 per gallon.
The ASX 200 index was off around 1.2 per cent at 5,717 by 1:11pm (AEST) and the broader All Ordinaries has dropped about $40 billion in value over the past two days.
Among other commodities, silver added 16 cents to $16.85 per ounce.
At first, some traders were quick to blame a so-called fat finger trade or computer program gone awry, but then the pound and other currencies followed through and traded lower against the dollar.
In Europe, Germany's Dax fell 1.4%. Nearly all of the action is a result of 59,010 June 4 puts being bought to open for an initial cash outlay of $767,130 (number of contracts * $0.13 premium paid * 100 shares per contract).
In Japan, the Nikkei 225 fell 1.25% as the yen held most gains this week even as it drifted lower on the day.
People walk past an electronic board showing Hong Kong share index outside a local bank in Hong Kong, Thursday, May 18, 2017.