(CNBC) — U.S. equities closed sharply lower on Wednesday as investors fretted over the latest news coming out of Washington.

“This is clearly Washington-driven,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management. “It’s a lot like 1998-99, when the market had to deal with the [Monica] Lewinsky scandal.”

The Dow Jones industrial average ended about 370 points lower, with Goldman Sachs contributing the most losses. The S&P 500 dropped 1.8 percent, with financials tumbling 3.1 percent to lead decliners. Financials posted their worst day since June 24 were pulled down by banks, with the SPDR S&P Bank ETF (KBE) falling 3.9 percent.

The Nasdaq composite lagged, shedding 2.6 percent, and posted its worst session since June 24.

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