U.S. stocks closed sharply lower Tuesday, with the Dow Jones Industrial Average dropping nearly 200 points, as losses in the technology sector led all three major indexes lower. All 30 stocks in the Dow closed lower, while the S&P 500 information technology sector was the biggest decliner in the index.

The Dow (INDEXDJX:.DJI) dropped 190.48 points, or 1.04 percent, to close at 18,042. The Standard & Poor's 500 (INDEXNASDAQ:.IXIC) fell 21.86 points, or 1.03 percent, to end at 2,104. The Nasdaq composite (INDEXSP:.INX) lost 56.61 points, or 1.11 percent, to finish at 5,033.

Technology stocks led the Dow lower Tuesday, with Apple Inc. (NASDAQ:AAPL) dropping more than 2 percent to close at $129.62. International Business Machines Corp. (NYSE:IBM) and Intel Corporation (NASDAQ:INTC) both lost 1 percent, while aerospace giant Boeing Co. (NYSE:BA) lost 1.5 percent.

Shares of Apple traded lower despite financial services firm Cowen and Company reiterating its Outperform rating on the tech giant Tuesday. The firm raised its 12-month price target on Apple from $135 to $140 on strong iPhone 6 sales forecasts. Timothy Arcuri, an analyst at Cowen, projects Apple will sell 50 million iPhones in the June quarter, offsetting iPad weakness and forecasts for sales of 3 million units of the company’s Apple Watch.

Apple shares have gained 48 percent in the last 12 months.

U.S. solar panel maker First Solar Inc. dropped 7 percent, sending the S&P 500 information technology sector down 1.5 percent. 

Meanwhile, the Nasdaq biotechnology index traded lower, led by a 6.5 percent decline from Alimera Sciences Inc. (NASDAQ:ALIM).

Shares of Time Warner Cable Inc. (NYSE:TWC) gained 7 percent Tuesday to close at $183.43 after Charter Communications Inc. (NASDAQ:CHTR), the fourth-largest U.S. cable operator, announced it will buy the company for $78.7 billion, including debt. Charter Communications’ stock price gained 2.5 percent to close at $179.81.

U.S. stocks traded lower in morning trading Tuesday following a series of mixed economic reports, while investors digested comments from a top Federal Reserve official. A rise in interest rates could trigger further bouts of volatility but should prove manageable for emerging market economies, Fed Vice Chairman Stanley Fischer said Tuesday.

“We have done everything we can, within the limits of forecast uncertainty, to prepare market participants for what lies ahead,” Fischer said.

The statement comes after Federal Reserve Chair Janet Yellen warned last week that delaying action to tighten the central bank's monetary policy would risk overheating the economy.

Meanwhile, U.S. consumer optimism rose modestly this month, rebounding from a sharp decline in April, but Americans remained cautious about the short-term outlook in May. The percentage of consumers expecting business conditions to improve over the next six months inched up from 15.4 percent to 15.6 percent, while those expecting business conditions to worsen also increased, from 9.1 percent to 10.8 percent, the Conference Board said Tuesday. 

The U.S. dollar soared to its highest level since July 2007 against the Japanese yen, while hitting a one-month high against the euro as concerns grow that Greece will default on loan payments. The U.S. dollar index, which measures the greenback against major world currencies, rallied 1 percent Tuesday to as high as $97.36.

No major U.S. economic data is scheduled for release Wednesday.

Jessica Menton is a writer who covers business and the financial markets. News tips? Email me here. Follow me on Twitter @JessicaMenton.