By Anora M. Gaudiano, MarketWatch , Ryan Vlastelica

Boeing was one of the day's biggest drags

U.S. stocks closed lower Tuesday, with major indexes turning decisively negative in afternoon trading and ending near their lows of the day as uncertainty over trade policy and other geopolitical issues remained high.

Read: Meet 'green gold' -- and the stock for betting on it (http://www.marketwatch.com/story/meet-green-gold-and-the-stock-for-betting-on-it-2018-05-22)

What did markets do?

The Dow Jones Industrial Average fell 178.88 points, or 0.7%, to 24,834.41. The S&P 500 lost 8.57 points, or 0.3%, to 2,724.44. Among the day's biggest decliners were industrial stocks, a sector that is heavily correlated with trade concerns. The group lost 1.3% while the materials sector lost 0.9%.

The Nasdaq Composite Index lost 15.58 points, or 0.2%, to 7,378.46.

The small-cap benchmark Russell 2000 index lost 0.7% points to 1,625.25, ending a four-day rally that took it to a series of records (http://www.marketwatch.com/story/russell-2000-hits-record-in-early-trading-2018-05-21).

Opinion: Here's what the Russell 2000's new high means for the S&P 500 (http://www.marketwatch.com/story/heres-what-the-russell-2000s-new-high-means-for-the-sp-500-2018-05-22)

Read:The strong dollar is a stock-market drag and poses a threat to earnings growth (http://www.marketwatch.com/story/the-strong-dollar-is-a-stock-market-drag-and-poses-a-threat-to-earnings-growth-2018-05-19)

What drove the market?

Trade policy continued to be a primary driver for investors, and the issue grew clouded on Tuesday. Asked if he was happy with how U.S.-China trade talks were going (http://www.marketwatch.com/story/trump-today-president-suggests-world--class-poker-player-xi-to-blame-for-shift-in-north-koreas-attitude-about-summit-2018-05-22), President Donald Trump told reporters, "Not really," and said negotiations "have a long way to go."

Optimism over trade had spurred a stock rally in Monday's session, after Treasury Secretary Steven Mnuchin said that the Trump administration would "put the trade war on hold" while working out details of a deal between the countries. Trump's comments seemed to offset Mnuchin's view.

Other geopolitical tensions also continued to hover in the background, with uncertainty over a historic meeting between Trump and North Korea's dictator Kim Jong Un. Vice President Mike Pence warned in an interview late Monday that North Korea cannot "play" Trump (http://www.marketwatch.com/story/north-korea-cannot-play-president-trump-warns-pence-2018-05-22) (http://www.marketwatch.com/story/north-korea-cannot-play-president-trump-warns-pence-2018-05-22) where nuclear disarmament is concerned. On Tuesday, Trump said a planned summit with Un may happen later than currently scheduled (http://www.marketwatch.com/story/trump-says-summit-with-north-koreas-kim-may-happen-later-than-scheduled-2018-05-22).

Meanwhile, laying out new demands for Iran on Monday (http://www.marketwatch.com/story/pompeo-lays-out-trump-administrations-demands-for-new-iran-deal-2018-05-21), the White House said any new nuclear deal with the U.S. would require Iran to stop enriching uranium and to pull its support for militant groups in the Middle East. The demands were met by immediate rejection from Iran.

Read:Here's the hidden stock-market risk investors need to watch out for (http://www.marketwatch.com/story/heres-the-hidden-stock-market-risk-investors-need-to-watch-out-for-2018-05-22)

What were strategists saying?

"For the moment, investors are taking a wait-and-see attitude with respect to the [trade] negotiations, especially with the other geopolitical issues weighing on the market," said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management.

"Issues like the future of the North Korea summit or negotiations with Iran are things that investors are very concerned about, though they're more psychological than things that would have a major economic impact. Our view is that markets will move higher over the remainder of the year, but it will be a volatile journey to get there."

What stocks were in focus?

Among notable decliners in the industrial space, Boeing Co.(BA) lost 2.5% while Caterpillar Inc. (CAT) ended down 1.7%. 3M Co. (MMM) fell 1.4%. All three were among the biggest decliners on both the Dow and the S&P.

J.C. Penney Co. (JCP) fell 6% after the company's chief executive quit to take over leadership (http://www.marketwatch.com/story/jc-penney-ceo-quits-to-join-lowes-2018-05-22-134853025) of Lowe's Cos. (LOW) . Shares of Lowe's fell 1.9%.

Toll Brothers Inc.(TOL) shares slumped 9.6% after the building company posted a 10% fall in second-quarter profit (http://www.marketwatch.com/story/toll-brothers-profit-dented-by-higher-charges-2018-05-22) on higher impairment charges, and said gross margin fell.

Kohl's Corp.(KSS) sank 7.4% despite better-than-expected earnings and an upbeat outlook (http://www.marketwatch.com/story/kohls-shares-jump-after-earnings-beat-guidance-raised-2018-05-22).

Shares of Micron Technology Inc.(MU) rallied 6.4% after the company raised its third-quarter outlook and announced a large stock-buyback program (http://www.marketwatch.com/story/micron-on-track-for-fresh-record-as-investors-cheer-massive-share-buyback-2018-05-22). The gain supported chip makers overall; the PHLX Semiconductor index rose 0.6%.

AutoZone Inc.(AZO) sank 9.5% after the company reported its first-quarter results (http://www.marketwatch.com/story/autozone-shares-jump-3-premarket-after-profit-blows-past-estimates-2018-05-22).

TJX Companies Inc.(TJX) shares rose 3.3% after the retailer's quarterly earnings came above estimates (http://www.marketwatch.com/story/tjx-cos-shares-jump-15-premarket-as-first-quarter-sales-blow-past-estimates-2018-05-22).

Read:GreenSky IPO: 5 things to know about the company seeking to end fintech IPO lull (http://www.marketwatch.com/story/greensky-ipo-5-things-to-know-about-the-company-seeking-to-end-fintech-ipo-lull-2018-05-21)

U.S.-listed shares of Sony Corp.(6758.TO), (6758.TO) fell 2.8% after the Japanese multinational conglomerate said it has agreed to buy Mubadala Investment Co.'s stake in EMI Music Publishing (http://www.marketwatch.com/story/sony-to-buy-mubadalas-stake-in-emi-music-for-about-23-billion-2018-05-21) in a roughly $2.3 billion deal.

Read:Netflix's new running mates: Barack and Michelle Obama (http://www.marketwatch.com/story/netflixs-new-running-mates-barack-and-michelle-obama-2018-05-21)

What did other markets do?

Asian markets finished mixed (http://www.marketwatch.com/story/nikkei-pulls-back-from-3-month-high-as-asian-markets-dip-2018-05-21), while European stocks inched higher (http://www.marketwatch.com/story/european-stocks-inch-higher-as-italy-tensions-ease-for-now-2018-05-22).

Read:'Greek-like crisis' fears hang over Italy's markets as populists ready government (http://www.marketwatch.com/story/greek-like-crisis-fears-hang-over-italys-markets-as-populists-ready-government-2018-05-21)

The dollar was continuing to retrace gains on Tuesday, while the 10-year U.S. Treasury note yield (http://www.marketwatch.com/story/treasury-yields-inch-higher-but-italian-rates-pull-back-as-politics-remain-in-focus-2018-05-22) was hovering around 3.07% after touching a seven-year intraday high of 3.126% on Friday (http://www.marketwatch.com/story/government-bonds-rally-as-geopolitics-reignite-buying-10-year-retreats-from-310-2018-05-18) (http://www.marketwatch.com/story/government-bonds-rally-as-geopolitics-reignite-buying-10-year-retreats-from-310-2018-05-18) (http://www.marketwatch.com/story/government-bonds-rally-as-geopolitics-reignite-buying-10-year-retreats-from-310-2018-05-18).

See:Stock-market investors have fewer excuses for shunning bonds (http://www.marketwatch.com/story/stock-market-investors-have-fewer-excuses-for-shunning-bonds-2018-05-21)

U.S. oil futures ended modestly lower (http://www.marketwatch.com/story/oil-prices-hover-at-3-12-year-highs-on-global-supply-worries-2018-05-22) (http://www.marketwatch.com/story/oil-prices-hover-at-3-12-year-highs-on-global-supply-worries-2018-05-22).

Read:Here's what an 'oil shock' would mean for the global economy (http://www.marketwatch.com/story/oil-shock-heres-what-100-crude-would-do-to-the-economy-2018-05-22)

Economic preview:Rising rates, higher gas have failed to kill the economic expansion (http://www.marketwatch.com/story/us-economy-charts-steady-course-despite-stronger-headwinds-2018-05-18)

Gold futures inched up 0.1% to $1,292.00 an ounce a day after settling at its lowest level of 2018 (http://www.marketwatch.com/story/gold-prices-tick-up-from-worst-levels-of-2018-2018-05-22). The ICE U.S. Dollar Index fell 0.1% to 93.530, as the pound strengthened against the buck (http://www.marketwatch.com/story/selling-pressure-stays-on-dollar-as-pound-climbs-on-boe-rate-hike-comments-2018-05-22) .

Bank of England policy maker Gertjan Vlieghe reportedly predicted up to two interest-rate increases a year (https://www.theguardian.com/business/live/2018/may/22/bank-of-england-governor-mark-carney-grilling-mps-rates-uk-economy-business-live), as officials testified in front of the U.K. Treasury committee.

(END) Dow Jones Newswires

May 22, 2018 16:36 ET (20:36 GMT)