U.S. stocks fell Tuesday to snap a two-session streak of gains, as investors exercised caution ahead of a monetary policy decision from the Federal Reserve, while gauging the potential impact of President Donald Trump's tariff policies.

The Fed will release its latest policy statement on Wednesday, where the central bank is widely expected to keep interest rates unchanged, along with its updated summary of economic projections (SEP).

Markets are currently pricing in about 60 basis points (bps) of cuts from the Fed this year, although several U.S. central bank officials have cautioned against the Fed moving too quickly on rates and said they would wait to see the impact of tariffs in economic data before making any policy shifts.

"There's just great uncertainty here about the tariffs, how extensive they are going to be, how that's going to economically impact us, how much the Fed might ease eventually and the economy in general," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

"There is a lot of confusion out there, and when there's confusion, when there isn't a real opportunity for stocks to go up and for companies to expand and make more money, there's fear."

According to preliminary data, the S&P 500 lost 60.39 points, or 1.06%, to end at 5,614.73 points, while the Nasdaq Composite lost 301.91 points, or 1.70%, to 17,506.75. The Dow Jones Industrial Average fell 255.49 points, or 0.61%, to 41,586.14.

Adding to inflation concerns, U.S. import prices unexpectedly rose in February amid higher costs for consumer goods.

Stocks had recently shown some signs of stabilizing after several weeks of declines that sent the S&P 500 and Nasdaq down more than 10% from their recent highs, also known as correction territory.

The blue-chip Dow is slightly more than 2% away from reaching correction levels.

Growth stocks were among the hardest hit, with the S&P 500 growth index down more than 2% at one point during the session. Communication services was the worst performing of the 11 major S&P sectors.

Russian President Vladimir Putin and U.S. President Donald Trump agreed to seek a limited 30-day ceasefire against energy and infrastructure targets in Ukraine, while talks aimed at advancing toward a broader peace plan will begin "immediately," the White House said.

Alphabet fell after the company said it would buy Wiz for about $32 billion in its biggest deal as the Google parent doubles down on cybersecurity.

Nvidia shares declined. The company is expected to reveal details of its latest AI chip at its annual software developer conference.

Tesla slumped after brokerage RBC slashed its price target on the EV maker's stock to $120 from $320, citing reduced expectations for its full self-driving pricing and robotaxi market share. Its shares are now down nearly 45% on the year.

Reflecting the defensive tone, investors moved to safe-haven assets, with gold trading at a record high, after crossing $3,000 per ounce for the first time last week.