The Dow Jones Industrial Average was down 142.22 points, or 0.53 percent, to 26,807.77. The S&P 500 decreased 25.18 points, or 0.84 percent, to 2,966.60. The Nasdaq Composite Index fell 118.84 points, or 1.46 percent, to 7,993.63.
The majority of 30 blue-chip stocks in the Dow traded lower around market close, with shares of Goldman Sachs down 2.67 percent, among the worst performers.
Shares of Apple extended a slight loss of 0.48 percent, despite the fact that U.S. financial services company Jefferies upgraded Apple to "buy" from "hold."
Nine of the 11 primary S&P 500 sectors traded lower around the closing bell, with the energy sector down over 1.6 percent, leading the losers.
On the economic front, U.S. consumer confidence index weakened to 125.1 in September, a sharp fall from August's 134.2, New York-based business research group the Conference Board said Tuesday.
The Present Situation Index -- based on consumers' assessment of current business and labor market conditions -- decreased from 176.0 to 169.0, according to the Consumer Confidence Survey of the Conference Board.
The Expectations Index -- based on consumers' short-term outlook for income, business and labor market conditions -- declined from 106.4 last month to 95.8 this month, said the survey.
"The escalation in trade and tariff tensions in late August appears to have rattled consumers," said Lynn Franco, senior director of economic indicators at the group, in a statement.
"While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers' confidence in the expansion," Franco noted.