(USA Today) - The Dow turned sharply lower Friday as investors reacted to heightened political risk and confusion surrounding the Trump presidency and his economic agenda after former national security adviser Michael Flynn pleaded guilty to lying to the FBI.

Wall Street sold off stocks aggressively amid initial media reports that were later confirmed by prosecutors in court today that Flynn was fully cooperating with special counsel Robert Mueller’s probe of Russian interference in the 2016 presidential election and that a senior official of the presidential transition team directed him to make contact with the Russians.

At its low for the day, the Dow fell as much as 350 points, following a huge rally Thursday that ended with the Dow surpassing the 24,000 milestone for the first time. The Dow recouped a big chunk of its losses and was down about 115 points, or about 0.5%, around 12:25 p.m. ET.

Reports that the Senate has the votes to pass its tax cut bill calmed investors' nerves.

The Flynn news unnerved financial markets, which have been rising on hopes that Trump's tax cut plan was moving closer to passage, which was viewed as positive for economic growth.

"Implications for political change are huge," said David Kotok, chief investment officer at money management firm Cumberland Advisors.

The latest turbulence in Washington raises fresh questions about Trump's political standing and ability to push through his legislative agenda.

"This introduces another layer of uncertainty which the markets hate," says Bill Hornbarger, chief investment officer at Moneta Group, an investment firm in Clayton, MO. "It will lead to more questions and turn the focus away from his legislative agenda and also sap support from people who want to distance themselves from him. This will make it more difficult for him to get things done until it is cleared up."

News of Trump's latest political troubles could be the shock that pushes markets lower after a year during which stocks have gone up pretty much in a straight line.

"This could create the correction needed for stocks," Kotok said.