Trading was delayed in Sao Paulo’s stock exchange and once it opened the circuit breaker stopped all operations within just a few minutes. That has not happened since the global financial crisis of 2008.
In a fortnight Mr Temer was about to start pushing his economic reform plan through Congress.
Until yesterday markets were very optimistic – but now many don’t see how Mr Temer could keep his job if the alleged tape in which he condones a bribe payment is handed over to authorities.
What happens next? If Mr Temer keeps his job, it will take a herculean effort to get Congress behind him again. If not, the Brazilian Congress will have to choose a new president indirectly.
Getting reforms approved is no longer a top priority for a country still in a deep economic crisis.
Trading has now resumed in Sao Paulo but could be frozen again if stocks fall further.
BBC South America business correspondent.
