The Dow dropped 1%, the S&P 500 shed seven-tenths of a percent and the Nasdaq lost nearly one percent.

Also weighing on the market were investors' fears that recent strong economic data would potentially curb interest-rate cuts from the Federal Reserve. That was also reflected Tuesday in the 10-year Treasury yield, which rose to its highest level since late November.

Michael Green is Chief Strategist at Simplify Asset Management.

"So, I think the really interesting question around the Fed is, the Fed has indicated that there will be three rate cuts -- the market is now challenging that on the back of strong data. Again, the data itself is not absolutely strong. It's relatively strong versus expectations. I don't see any reason to believe that the Fed is not actually going to follow through on their rate cuts, but it is certainly in question right now."

Shares of Tesla dropped roughly 5% after the electric vehicle maker posted a decline in quarterly deliveries for the first time in nearly four years and missed Wall Street estimates.

Shares of tech giants Nvidia, Apple and Microsoft also ended the session lower.

Moving to retail, shares of Calvin Klein-parent PVH Corp tumbled 22% after the retailer forecast a roughly 11% drop in first-quarter revenue.

And healthcare stocks were also among the day's weakest performers. Shares of UnitedHealth tumbled nearly 6.5%, CVS Health lost more than 7% and Humana plunged nearly 13.5% after the U.S. government kept reimbursement rates for providers of Medicare Advantage health plans unchanged.