Financial markets turned defensive, with U.S. stocks sliding the most in two weeks and Treasuries rallying with gold after Michael Flynn pleaded guilty to lying to federal agents. Equities pared the worst of the losses as Senate Republicans edged closer to passing tax cuts.
The S&P 500 Index fell as much as 1.5 percent before cutting the drop by more than two-thirds. The index remains on track for its best week since mid-September after improving odds for tax reform pushed equities to records Thursday. The 10-year Treasury yield fell five basis points Friday and Bloomberg’s dollar index slid as investors flocked to the yen.
Haven assets surged after the former national security adviser agreed to provide cooperation that promises to take Special Counsel Robert Mueller deep into Donald Trump’s administration, unnerving markets that have been rallying on speculation tax cuts will jump start already strong economic growth. Equities pulled back from their …