Among earnings, Target declined after the retail giant warned its annual earnings will likely be near the lower end of its previous forecast as the company anticipates ongoing cautious consumer spending.
Staples plunged to lead the S&P 500 laggards after the office supplies retailer posted earnings and revenue that missed projections, citing weakness in its retail stores and international operations.
American Eagle Outfitters dropped sharply after the teen apparel retailer issued disappointing guidance for the crucial back-to-school quarter. Additionally, the company said same-store sales will drop by a mid-to-high single digit percentage in the current quarter. Rivals Abercrombie & Fitch and Aeropostale also declined.
Meanwhile, Lowe's rallied to lead the S&P 500 gainers after the home-improvement company topped quarterly expectations and boosted its full-year outlook. The news came a day after rival Home Depot posted strong earnings results.
Hewlett-Packard edged lower after the company reassigned Dave Donatelli, the executive vice president in charge of the firm's enterprise group to a new role. Donatelli's new role will be announced when the company posts its quarterly results after the closing bell.
L Brands, parent company of Victoria's Secret, is also slated to post earnings after the closing bell.
Apple climbed, bucking the downward trend of the broader markets, after UBS raised its price target on the iPhone maker to $560 from $500.
Goldman Sachs experienced a glitch on Tuesday that resulted in a large number of erroneous single stock and ETF options trades. Many of the trades may wind up being erased, but the error could still cost the firm over $100 million, according to a person familiar with the situation.
On the economic front, existing home sales jumped 6.5 percent in July to an annualized rate of 5.39 million, according to the National Association of Realtors. Economists in a Reuters survey expected a total of 5.15 million annualized units versus 5.08 million annualized units in June.
Weekly mortgage applications declined for a second week and rising interest rates put a damper on refinancing activity, according to data from the Mortgage Bankers Association.