U.S. equities closed lower on Tuesday as large-cap technology stocks fell more than 1 percent, while a Senate vote delay raised policy uncertainty.

The Dow Jones industrial average pulled back about 100 points, with 3M and Apple leading decliners. The 30-stock index fell after multiple reports said the Senate will hold off on voting on a bill to repeal and replace Obamacare until after the July 4 recess.

"That probably created a little volatility here as well," said John Caruso, senior market strategist at RJO Futures, referring to the vote's delay.

The CBOE Volatility Index (VIX) (STOXX: .VIX), widely considered the best gauge of fear in the market, perked up on the back of the news, reaching 11.

President Donald Trump has said repeatedly he wants to repeal and replace Obamacare before moving on to other items on his agenda, including tax reform.

"If the Senate can conjure up enough votes to pass this, then we might get some more legislation done this year," said Art Hogan, chief market strategist at Wunderlich Securities. "Barring that, it might be a slog of a summer."

The Nasdaq composite underperformed, falling 1.6 percent, as shares of Google-parent Alphabet declined more than 2 percent. The EU fined Google a record $2.7 billion, as regulators ruled the company violated antitrust rules .

"Alphabet is what's weighing on technology stocks," said Robert Pavlik, chief market strategist at Boston Private. "I find the news about Google incredibly hard to believe. Do they not have other search engines in the EU?"

Shares of Facebook, Netflix and Amazon followed Alphabet lower, closing at least 1.5 percent lower.

Technology stocks have been closely watched by Wall Street this year as the sector has outperformed. Entering Tuesday's session, the sector had gained nearly 20 percent in 2017.

The S&P 500 dropped 0.8 percent as the Technology Select Sector SPDR exchange-traded fund (XLK) closed below its 50-day moving average, a key technical indicator, for the first time since April 13.

"Short-term momentum has deteriorated over the past few days, but the impact to the [S&P 500] has been minimal in that it remains solidly above initial support near 2400," said Katie Stockton, chief technical strategist at BTIG, in a note Tuesday.

"We see this as a testament to the healthy breadth behind the market, which has been helped by rotation on the sector front."

In economic news, consumer confidence for June topped expectations, hitting 118.9. Economists polled by Reuters expected a print of 116.

Wall Street was also on the lookout for remarks from key Federal Reserve officials, including Fed Chair Janet Yellen. Yellen said banks are "very much stronger," adding that another financial crisis is not likely in our lifetime."

Separately, Philadelphia Fed President Patrick Harker said he sees the Fed on track to raise rates once more this year.

Treasury yields spiked higher after European Central Bank President Mario Draghi said the central bank could adjust its monetary-policy tools. The benchmark 10-year yield rose to trade around 2.2 percent.

"Today's action is partially driven by tech and interest rates," said Michael Shaoul, chairman and CEO of Marketfield Asset Management. "What's going on is a repricing of global interest rates."

The Dow Jones industrial average (Dow Jones Global Indexes: .DJI) fell 98.89 points, or 0.46 percent, to close at 21,310.66, with Verizon leading decliners and JPMorgan Chase outperforming.

The S&P 500 (INDEX: .SPX) declined 19.69 points, or 0.81 percent, to end at 2,419.38, with information technology leading 10 sectors lower and financials the only advancer.

The Nasdaq (NASDAQ: .IXIC) pulled back 100.53 points, or 1.61 percent, to close at 6,146.62.

About two stocks declined for every advancer at the New York Stock Exchange, with an exchange volume of 885.81 million and a composite volume of 3.545 billion at the close.

—CNBC's Evelyn Cheng contributed to this report.

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