Protests were planned in several cities, and opposition politicians took to Twitter and news outlets to call for Temer to resign or be impeached, arguing that his government no longer had legitimacy. "I demand a full and quick investigation to clear up (the situation) for the Brazilian people".
Within 90 minutes of the opening, Brazil's main Ibovespa stock index dropped 10 percent and trading was stopped for 30 minutes.
A shock bribery scandal involving the Brazilian president has caused the country's benchmark index to suffer its fastest decline since the 2008 financial crisis and the real to drop 8 per cent against the United States dollar.
The Federal Supreme Court suspended Temer ally Senator Aecio Neves as police searched his home and office.
The scandal is the latest shockwave from the wider "Car Wash" graft probe ripping through Brazilian politics, involving vast bribes and embezzlement.
The Brazilian Bovespa index fell 8.8% after reports that President Michel Temer was involved in an alleged bribery, claims that Mr. Temer has denied.
The prominent daily newspaper O Globo reported on Wednesday that a meat producer had recorded the President giving the go-ahead to bribe Cunha to "keep quiet" while he was in jail. However the president was reported to have asked the Supreme Court immediately to release the contents of the secret recording so that he could respond in a public address penciled in for later Thursday.
President Temer confirms meeting with one of the founders of slaughterhouse JBS but denies having bought Cunha's silence.More news: AB de Villiers: Ben Stokes lifted his game in IPL
(AP Photo/Andre Penner). A woman reads a newspaper with a front page headline that reads in Portuguese: "It's the End: Resignation, Removal or Impeachment?" with regards to corruption allegations against Brazil's President Michel Temer, in Sao Paulo, B. "I know what I have done and I know of the correctness of my actions", Temer said.
Rousseff was impeached a year ago after the Senate found her guilty of breaking budgetary laws amid the swirling corruption investigation - though she herself was not accused of corruption.
Rousseff and her leftist allies accuse him of having engineered her impeachment and his own rise to power past year in what they say amounted to a coup d'etat.
Temer is deeply unpopular but has been able to rely on a dominant alliance between his centre-right PMDB party and the PSDB Social Democrats, along with a coalition of smaller parties. This reversed a steady strengthening that reflected gradual renewal of investor confidence in Latin America's biggest economy after two years of recession.
"This climate isn't one in which to work", Rodrigo Maia, president of the lower chamber, told Globo News.
In it, two men can be heard talking about Cunha, who is now serving a sentence on corruption charges but many believe could still provide damaging testimony about dozens of other politicians.
If the allegations are proven true, "President Temer is unlikely to finish his term", Eurasia wrote, adding that at the very least the matter will delay major reforms Temer is proposing.