(Bloomberg) -- For the first time, a Wall Street that’s been giddy over Donald Trumpis starting to ask some hard questions.

From Day 1, markets have rallied, defying what many of thesame Wall Street types said would be a disastrous electionoutcome.

Related: Economic optimism hugs coasts, worriesplague heartland

Since then, U.S. stocks have hit record after record, driving upshares of Goldman Sachs to JPMorgan Chase to Apple, as investorsquickly focused on what his pro-business, tax-cutting agenda wouldmean for corporate profits.

But the steady drumbeat of bad news may finally be taking itstoll.

On Wednesday, stocks tumbled, Treasuries soared and volatilitycame roaring back as a series of damaging revelations -- fromTrump’s disclosure of classified information to Russian officialsto reports that he pressed FBI Director James Comey to drop a probeinto former National Security Adviser Michael Flynn -- promptedmany on Wall Street to wonder whether the turbulence that hasshattered the market’s calm might be the start of somethingbigger.

It’s also left many to ask whether the market was blinded by itsown optimism over Trump’s business-friendly agenda.

“Crazy times, huh?” said Matt Maley, an equity strategist atMiller Tabak & Co. “I’ve talked to a few personal friendsand a few customers who I know are supportive of Trump that aresaying, boy, this isn’t good.”

Of course, financial markets are often punctuated by bouts ofalarm that have unsettled traders during normal times. And up tonow, it’s been easy to dismiss the president’s missteps as theprice of electing an outsider. But now, the biggest question iswhether Trump’s presidency is in trouble.

For some of the world’s largest banks, Trump’s firing of Comeylast week was a signal moment.

At least two global firms have started mapping out how financialmarkets might react to an impeachment -- a scenario they still sawas improbable, according to people with knowledge of the matter,who declined to speak publicly because such deliberations arepolitically sensitive.

While their work is just beginning and it’s too early to drawconclusions, the people said, it’s a telling sign of just howserious things have become.

“The political risk has been upped here -- things sound moreominous and serious than a week ago,” said Gary Pollack, thehead of fixed-income trading at Deutsche Bank AG’s Private WealthManagement unit.

Much of the problem is how pervasively investors had tuned outTrump in the months before the latest scandal broke. The CBOEVolatility Index’s average level since December has been 25 percentbelow that of 2016 -- not exactly a turbulent year to begin with.Everything from Treasuries to currencies and stocks had beenlimping along without a care -- before Wednesday.

“Markets are very blasé about political risk until the very lastmoment,” former Federal Reserve Chairman Ben S. Bernanke said atthe SkyBridge Alternatives Conference, known as SALT, in Las Vegas.“They go along until something happens that pulls the rug out fromunder their assumptions.”

The S&P 500 Index, which set another all-time high just twodays ago, was routed in the worst selloff in eight months, whilethe Dow Jones Industrial Average’s 372-point slide was its steepestsince the election. The dollar fell a sixth day, while yields on10-year Treasuries tumbled by the most since the day after theBrexit vote.

Trump is facing the deepest crisis of his presidency aftercontents of a memo written by Comey surfaced Tuesday, alleging thatthe president asked him to drop an investigation of Flynn. Thatcame after Trump disclosed highly classified intelligence toRussian officials in a meeting last week.

“The market is running with politics,” said Bret Barker, whooversees U.S. fixed-income at TCW Group Inc., which manages $194billion. “There’s just not much out there to change fundamentalsright now.”

A vacuum of catalysts faced anyone hoping the traditionalsaviors of markets would step up to calm things down. Earningsseason is over, the next report on U.S. employment is 16 days away,and the Fed doesn’t meet again for a month. That’s potentially badnews for a stock market whose 10 percent rally since Election Dayhas pushed valuations to the highest levels since just after thedot-com bubble.

The biggest beneficiaries of the Trump trade were bearing thebrunt of the carnage on Wednesday. Exchange-traded funds tuned tostocks with the most sensitivity to market swings were having theirworst day in two months. Bank shares in the S&P 500 plunged 3percent, bringing the slide from a March 1 record to 8.6percent.

“That’s one of the problems with rather a quiet market that evena small ripple could look pretty big,” said Brian Jacobsen, chiefportfolio strategist at Wells Fargo Funds Management. “Sometimes ifit’s too quiet, people think things can only get worse.”

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