A trader wearing a 'Dow 26,000' hat works on the floor of the New York Stock Exchange (NYSE) in New York.

Michael Nagle | Bloomberg | Getty Images

A trader wearing a ‘Dow 26,000’ hat works on the floor of the New York Stock Exchange (NYSE) in New York.

But Robert Pavlik, chief investment strategist at SlateStone Wealth, said he does not think this is the start of a major pullback. “I think people are looking for an excuse to sell,” he said. “This is the first wave of selling we’ve seen in a while.” Pavlik added this selling pressure could present a buying opportunity for investors who have cash on the sidelines.

The Cboe Volatility index (VIX), widely considered the best fear gauge in the stock market, rose to its highest level since August.

Shares of UnitedHealth were the worst performers on the Dow, falling 4.6 percent. UnitedHealth fell after Amazon, J.P. Morgan Chase and Berkshire Hathaway announced plans to partner on ways to cut health-care costs. Express Scripts’ stock, meanwhile, was among the biggest laggards in the S&P 500, dropping 8.5 percent.

As of Monday’s close, health care was on pace for its best monthly performance since Oct. 1999 when it gained 10.98 percent. On Tuesday, the sector fell 1.8 percent.

In economic news, consumer confidence rose to 125.4 in January as Americans expect the U.S. economic momentum from 2017 to carry over into the new year.

Elsewhere, President Donald Trump is expected to deliver his State of the Union address on Tuesday night.

The address will come after the administration announced Monday that it wouldn’t immediately inflict further sanctions on Russia under a new law designed to punish Moscow’s alleged meddling in the U.S. 2016 election. The administration stated that the measure was already having an impact on companies in Russia.

—CNBC’s Gina Francolla and Chris Hayes contributed to this report.

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