The Dow Jones Industrial Average fell 375.88 points, or 1.34 percent, to 27,772.76. The S&P 500 decreased 47.66 points, or 1.40 percent, to 3,360.97. The Nasdaq Composite Index slid 177.88 points, or 1.57 percent, to 11,154.60.
Ten of the 11 primary S&P 500 sectors pulled back, with consumer discretionary down 2.13 percent, leading the laggards. Utilities rose 0.86 percent, the lone gaining group.
Trump tweeted Tuesday afternoon that he has instructed his representatives to stop negotiating on a new fiscal stimulus bill until after the election.
The move unnerved investors who hoped Washington lawmakers would strike a deal soon, experts noted.
The news came as U.S. Fed chief warns of recessionary dynamics amid the COVID-19 fallout.
U.S. economic recovery remains far from complete and a prolonged slowing in the pace of improvement over time could trigger typical recessionary dynamics, U.S. Federal Reserve Chairman Jerome Powell said Tuesday at the National Association for Business Economics virtual annual meeting.
He noted that U.S. fiscal and monetary policy actions have so far "substantially muted" the normal recessionary dynamics that occur in a downturn, but without further support those downward trends could still emerge.
The Fed last month kept its benchmark interest rate unchanged at the record-low level of near zero and signaled to maintain this target range until at least 2023, noting that the path of the economy will depend significantly on the course of the coronavirus.
U.S.-listed Chinese companies traded mostly higher on Tuesday, with seven of the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending the day on an upbeat note.
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