• ABC News reported that Flynn would testify that he was directed to make contact with the Russians.
• The major averages hit their session lows on the report.
• Gold and Treasuries spiked higher following the ABC report as investors fled to market safe havens.

Stocks fell Friday on a report that Michael Flynn was directed by President Trump to talk to Russians.

ABC News reported that Flynn, the former national security adviser, would testify that he was directed to make contact with the Russians.

In a statement, Flynn said he agreed to “cooperate with the Special Counsel’s Office reflect a
decision I made in the best interests of my family and of our country.”

“If you believe the market has been rallying in the last 13 months [on hopes of fiscal stimulus, etc, this report] potentially unravels all of that,” said Jeremy Klein, chief market strategist at FBN Securities. “Markets don’t like uncertainty and this is the ultimate uncertainty.”

The major averages hit their session lows on the report, with the Dow Jones industrial average briefly dropping more than 300 points before trading 160 points lower.