Stocks held lower on Tuesday even as another jump in crude oil extended its rally into a fourth session.
The S&P 500 was down 0.39%, the Dow Jones Industrial Average fell 0.3%, and the Nasdaq slipped 0.47%.
Oil prices continued to move higher in day four of a rally inspired by hopes over an output freeze from major oil-producing countries. The Organization of Petroleum Exporting Countries is set to meet next month and in recent days members including Saudi Arabia and Russia have suggested a willingness to discuss a production freeze deal.
West Texas Intermediate crude oil, the U.S. benchmark, rose 1.8% to $46.58 a barrel on Tuesday.
Stock losses followed another record-making trifecta for Wall Street on Monday as stocks got a big boost from another rally in crude oil. The S&P 500 and Dow hit new records, breaking the highs seen last Thursday, while the Nasdaq added to records achieved on Friday. All-time intraday highs were also reached.
The chances of a September interest rate hike from the Federal Reserve rose on Tuesday after New York Fed President Dudley backed an increase sooner rather than later. The Fed is "edging closer towards the point in time where it will be appropriate I think to raise interest rates further," Dudley told Fox Business Network. The Fed initially raised rates in December, the first increase in nearly a decade.
The economic recovery and second-half outlook likely warrants "at least one" interest rate hike this year, Atlanta Fed President Lockhart said in a speech on Tuesday.
