Stocks fell sharply , but the Dow rebounded from its lows after Trump tweeted that he would release the full declassified transcript of his conversation with Ukraine's president. The market fell again when The Washington Post reported t hat Pelosi would announce a formal impeachment inquiry . The market's sell-off was its largest reaction so far to any headline about impeachment and Trump.

House Speaker Nancy Pelosi told reporters she would have an announcement at 5 p.m. ET Tuesday, stirring speculation that it would be about an impeachment inquiry.

If Democrats pursue an impeachment of President Donald Trump, it could rattle markets and create temporary uncertainty, but the GOP-led Senate may not go along with any effort to oust Trump or stop any of the president's economic initiatives.

"From strictly a market's point of view, the question will be, is it likely to succeed, and if it does, what does a [Vice President Mike] Pence administration look like, and what does that mean for the 2020 election," said Ed Keon, chief market strategist at QMA. "It is unlikely to succeed because of the composition of the Senate. If you net it all out, the end result is likely to be the status quo. I don't expect that to have a big effect on the market."

The wrangling between the two parties and legislative paralysis that could result, as proceedings drag on, would be a negative for stocks.

"My sense is the impeachment is well ahead of the country. I don't think it's going to be successful, and ... I don't think the country is behind it. It just adds to uncertainty." said Marc Chandler, global market strategist at Bannockburn Global Forex. "In some ways, what we're saying is Democrats might push for impeachment. Impeachment isn't too popular. Trump would likely have a second term. I think the market would like that. Many people think Trump delivered the goods — tax cuts, deregulation, and conservative judges."

Tom Block, Fundstrat Washington policy strategist, said the impeachment process could backfire on Democrats, just as the Clinton impeachment effort backfired on Republicans.

"I think impeachment doesn't hurt Trump. Once the market thinks about it, it's just a side show. [Senate majority leader] Mitch McConnell and his crowd would not impeach Trump," said Block.

He said Trump would be comfortable fighting back at an impeachment process.

"Trump doesn't mind talking about that. It's like attacking Hillary, attacking 'The Squad.' In his own mind, he doesn't think he did anything. He said 'I called them, so what,'" said Block. "He feels much more comfortable talking about that. His big problem is his people who are basically Trump supporters and can't get health insurance. He doesn't speak as fluently when he's talking about real issues."

Art Hogan, chief market strategist at National Securiities, said there is a risk that the impeachment process could hurt U.S. China trade talks. "This is going t be news that spills out over time, but I can't imagine the start of this process improves the tone of the U.S.-China trade talks…if I'm China I feel empowered. This is a market that's been hanging on that tone getting better and I think it just got worse on the president's hawkish tone at the UN and this process," said Hogan. Earlier Tuesday, Trump spoke at the U.N. and criticized China's policy on technology transfers.