Stocks were whipsawed on Tuesday by worries about President Donald Trump's political future.

The S&P 500 dropped 0.8%, its biggest one-day drop since Aug. 23, to 2,966.60. The Nasdaq Composite also had its worst day in a month, dropping 1.5% to 7,993.63. The Dow Jones Industrial Average closed 142.22 points lower, or 0.5% at 26,807.77 after falling more than 200 points at one point.

House Speaker Nancy Pelosi will announce a formal impeachment inquiry later on Tuesday after she meets with her caucus to discuss the call Trump had earlier this year with Ukraine's leader, Volodymyr Zelensky, where he allegedly pressured him to investigate Democratic presidential hopeful Joe Biden's family.

"Now we have the facts, we're ready," Pelosi said.

A spokesman for the former vice president said Biden will urge Trump to comply with congressional requests for information. The spokesman added that Biden thinks Congress has no choice but to impeach Trump if he does not comply. Trump has admitted to talking to Zelensky about Biden but denied pressuring him. Rep. John Lewis, D-GA, tweeted in support of Trump's impeachment, noting: "The future of our democracy is at stake." Other prominent Democrats, including Sen. Dick Durbin of Illinois, also called on Tuesday for Trump's impeachment.

Stocks trimmed some of their losses after Trump said he would release the full transcript of the controversial call. Trump said in a series of tweets he "authorized the release tomorrow of the complete, fully declassified and unredacted transcript of my phone conversation" with Zelensky.

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"In any news-driven market, that could have contributed to selling here, and then Biden came out and said 'I support impeachment.' Up until this point, I thought the political stuff didn't mean anything. Now that it becomes real, I can't discount it," said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Stocks have surged since Trump was elected as he ushered in business friendly policies favored by Wall Street including a tax cut and decreased regulation. The Dow has surged more than 46% since Trump's election.

On top of the risks to Trump, investors worry the political turmoil surrounding an impeachment could weigh on an already fragile economy.

Stocks have previously struggled when a president faces the possibility of impeachment.In 1998, the S&P 500 fell about 20% at one point from its high to its low as independent counsel Kenneth Starr ramped up his investigation of President Bill Clinton for perjury and obstruction of justice, according to CFRA. The market would bottom as the House began impeachment proceedings and then would later recover all those losses and hit an all-time high in November of that year.