Stocks fell on Tuesday as tech shares were under pressure and lawmakers continued their debate over the next coronavirus relief package.
Shares of Amazon slipped 1.8% and Netflix declined by 1.4%. Alphabet shares fell 1.7%. Facebook shares dipped 1.5% and Apple closed 1.6% lower.
"All of the big momentum tech names are stalling out," said Mark Tepper, CEO of Strategic Wealth Partners. "They've carried people's portfolios and now they're running out of steam."
Stocks that would benefit from an economic reopening rose. United and American Airlines gained more than 3% each. Delta advanced 1.7%. Carnival closed 4.2% higher and Norwegian Cruise Line jumped 6.3%.
A plan unveiled by Senate Republicans would include relief for jobless Americans, another direct payment to individuals of up to $1,200, and more Paycheck Protection Program small business loan funds, among other provisions. It would also set federal unemployment insurance at 70% of a worker's previous wages, replacing the $600 per week which states stopped paying out this week.
In an interview with CNBC's Kayla Tausche, Senate Majority Leader Mitch McConnell said a bill without liability protection for corporations and other entities would not pass the Senate floor.
However, House Speaker Nancy Pelosi said Monday night that Republicans are "not really ready to have a serious negotiation," adding: "We have some other priorities that we want to see in the bill, but they're not even getting to the fundamentals of food and rent and economic survival."
"The cutting of the unemployment benefits is setting us up for a political battle and that could take time," said Peter Cardillo, chief market economist at Spartan Capital Securities, noting this was weighing on market sentiment.
The bill comes as coronavirus cases continue to rise across the U.S. So far, more than 4.2 million infections have been confirmed along with at least 147,303 deaths in the U.S., according to Johns Hopkins University.
Stocks were also under pressure after the release of disappointing quarterly numbers from McDonald's and 3M.
McDonald's shares slid 2.5% after the fast-food giant posted a quarterly profit that missed analyst expectations along with a 30% drop in overall revenue. 3M, another Dow component, dropped 4.8% after its quarterly earnings and revenue were lower than expected.
This is the busiest week of the corporate earnings season, with Apple and Amazon among the companies set to report later this week.
Through Tuesday morning, more than 160 S&P 500 companies have reported calendar second-quarter earnings. Of those companies, 81% have beaten expectations, according to data from The Earnings Scout.
"The CQ2 reports in the last 12-18 hours, while numerous, don't really shift the macro narrative a whole lot (they largely confirm what most people already suspect)," said Adam Crisafulli, founder of Vital Knowledge.
Meanwhile, the Federal Reserve started its two-day policy meeting on Tuesday, which will be followed by an interest rate decision on Wednesday.
The FOMC decided to maintain the target range for the federal funds rate at 0-0.25% at its last meeting in June as it continued to deal with the impact of the coronavirus pandemic on the U.S. economy. On Tuesday, the Fed announced it would extend its lending programs through the end of 2020.
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