U.S. equities tumbled for the second day in a row on Tuesday, with health care and energy shares leading the retreat, as investors took another round of profits following solid gains over the first four weeks of 2018--the S&P 500's best start to a year since 1987.

The Dow Jones Industrial Average tumbled 1.4% to 26076.89, the S&P 500 dropped 1.1% to 2822.43, and the Nasdaq Composite declined 0.9% to 7402.48. The three indices opened Tuesday solidly lower and kept within a pretty narrow range throughout the session. Adding in Monday's decline, the S&P 500 is down 1.8% for the week, while the Dow and the Nasdaq hold week-to-date losses of 2.0% and 1.4%, respectively.

10 of 11 sectors finished Tuesday in the red. The heavily-weighted health care group showed particular weakness, losing 2.1%, after Amazon (AMZN 1437.82, +20.14), Berkshire Hathaway (BRK.A 323000, -499), and JPMorgan Chase (JPM 115.11, -1.09) announced that they're forming a company focused on reducing health care costs for their U.S. employees. Health care providers like UnitedHealth (UNH 236.65, -10.76), Anthem (ANTM 243.44, -13.58), and Cigna (CI 207.89, -16.01) lost between 4.4% and 7.2% in reaction to the announcement.

Meanwhile, drug maker Pfizer (PFE 37.80, -1.22) and health care provider Aenta (AET 187.89, -5.85) lost 3.1% and 3.0%, respectively, despite reporting better-than-expected earnings for the fourth quarter. Pfizer also issued upbeat guidance for fiscal year 2018.

Like health care, the energy sector was especially weak, losing 2.0%, as the price of crude oil declined for the second consecutive session; West Texas Intermediate crude futures dropped 1.6% to $64.54 per barrel and now sit about 2.5% below the three-year high they touched last Friday.

On a positive note, the consumer discretionary sector (-0.5%) performed relatively well, even though McDonald's (MCD 172.48, -5.29) tumbled 3.0% after beating Q4 earnings and revenue estimates, and Harley-Davidson (HOG 50.84, -4.45) dropped 8.1% after a disappointing fourth quarter and downbeat motorcycle shipment guidance for fiscal year 2018. Amazon (AMZN 1437.82, +20.14), which climbed 1.4% to a new all-time high, helped keep the sector's loss in check.

The lightly-weighted utilities sector (+0.2%) was the lone advancer, but the telecom services sector (unch) finished not far behind.

In the bond market, U.S. Treasuries ended Tuesday mostly lower, with longer-dated issues showing particular weakness. The yield on the benchmark 10-yr Treasury note climbed three basis points to 2.73%, while the 2-yr yield finished unchanged at 2.12%. Yields move inversely to prices.

Elsewhere, equity indies in the Asia-Pacific region settled lower, with Japan's Nikkei (-1.4%) leading the retreat, while the Euro Stoxx 50 lost 0.9%. The U.S. dollar lost 0.1% against the euro (1.2396), 0.5% against the British pound (1.4144), and 0.1% against the Japanese yen (108.82).

At 9:00 PM ET, President Trump will deliver his first State of the Union address. The president is expected to look both forwards--by pushing for a bipartisan deal in Congress on immigration and infrastructure spending--and backwards--by touting the GOP's victory on tax reform.

Reviewing Tuesday's economic data, which included the Consumer Confidence Index for January and the S&P Case-Shiller Home Price Index for November:

• The consumer confidence reading for January increased to 125.4 (Briefing.com consensus 124.0) from the prior month's revised reading of 123.1 (from 122.1).
  • The key takeaway from the report is that consumers' expectations improved despite some ambivalence about their income prospects over the coming months, which the Conference Board said could be related to some uncertainty regarding the tax plan.
• The Case-Shiller 20-city Index increased 6.4% in November, while the October increase was revised to 6.3% from 6.4%.

On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 AM ET, the ADP Employment Change report for January (Briefing.com consensus 190K) at 8:15 AM ET, the Employment Cost Index for the fourth quarter at 8:30 AM ET, the Chicago PMI for January (Briefing.com consensus 61) at 9:45 AM ET, and Pending Homes Sales for December (Briefing.com consensus +0.6%) at 10:00 AM ET.

In addition, the Fed's latest policy directive will be released at 2:00 PM ET.

• Nasdaq Composite: +7.2% YTD
• S&P 500: +5.6% YTD
• Dow Jones Industrial Average: +5.5% YTD
• Russell 2000: +3.1% YTD