The S&P 500 pulled back 0.8 percent, with health care and energy as the worst-performing sectors.
The Dow Jones Industrial Average was retreating sharply lower on Tuesday, with the blue-chip gauge on pace for its worst single-session decline in about 8 months. Looking ahead, investors are awaiting the State of the Union address from President Donald Trump later Tuesday as well as the Federal Reserve's latest policy update on Wednesday.
The selloff set traders in the options market fretting about a near-term shock to equities and the Cboe Volatility Index .VIX , the most widely followed barometer of expected near-term stock market gyrations, closed up 0.95 points at 14.79, its highest close since August 17.
"I think despite this selloff, all indications point to a firming economy and I do expect to see some bargain hunters step in soon", Pavlik said.
Winners and Losers: Wynn Resorts sunk 9.32 percent as the hotel and casino company continues to feel the heat from the Wall Street Journal's reporting of sexual misconduct allegations against CEO Steve Wynn.
Harley-Davidson dropped 7.7 percent after the motorcycle maker forecast a drop in shipments this year. Chevron (NYSE:CVX) was down 2.5%.