"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.