U.S. stocks closed sharply lower Tuesday, with the blue-chip Dow Jones Industrial Average plunging more than 300 points, erasing all of its gains for the year as a strong U.S. dollar and renewed weakness in oil prices weighed on investor optimism. The sell-off in equities pushed both the blue-chip Dow and S&P 500 in negative territory for 2015.

The Dow, which measures the share prices of 30 large industrial companies, plunged 332.78 points, or 1.85 percent, to close at 17,662.94. The S&P 500 stock index fell 35.27 points, or 1.7 percent, to end at 2,044.16. The Nasdaq composite dropped 82.64 points, or 1.67 percent, to finish at 4,859.79.

For the year, the Dow is down 0.81 percent, or 144 points and the S&P 500 is down 0.66 percent, or 13.5 points. However, the Nasdaq is up 124 points, or 2.6 percent. The sell-off across the U.S. financial markets Tuesday was also driven by two words: interest rates.

“Today, the market is spooked because Dallas [Fed] President Richard Fisher is calling for a prompt increase in rates. So, the impression is that anyone who was thinking that the increase would come later than June is now unwinding that bet,” said Keith Bliss, senior vice president at Cuttone & Co.

Investors were cautious in early trading after the U.S. dollar surged to multiyear highs against the euro and the Japanese yen, driven by speculation that the U.S. Federal Reserve could raise interest rates sooner than previously thought. However, U.S. stocks were not the only asset that declined Tuesday. Gold futures dropped $6.40 an ounce to $1,153.80, its weakest closing price since Nov. 12. The Fed has kept interest rates at historic lows -- near zero since December 2008.

The move helped boost the price of gold. The commodity’s decline Tuesday was driven by expectations that the Fed will hike rates as soon as June. Global commodity prices are usually quoted in dollars and are likely to fall when the U.S. dollar is strong, meaning gains for the greenback typically signal a drag on commodity prices, for materials such as industrial metals and oil.

Crude prices closed lower Tuesday, with U.S. oil falling below $49 a barrel on concerns global crude inventories will continue to build. Total oil production in 2015 is expected to rise to 9.35 million barrels per day, slightly higher than the 9.3 million barrels per day forecast last month, the Energy Information Administration said Tuesday in its monthly short-term energy outlook.

West Texas Intermediate crude, the benchmark for U.S. oil prices, fell 3.4 percent, to $48.29 a barrel, for April 15 delivery on the New York Mercantile Exchange. Meanwhile, Brent crude, the benchmark for global oil prices, dropped more than 3 percent, to $56.63 a barrel, for April 15 delivery on the London ICE Futures Exchange.

Economists will sort through a series of data Wednesday, including mortgage applications and the U.S. federal budget for February. Applications for U.S. home mortgages rose slightly higher in the week ended Feb. 27 as interest rates dipped, the Mortgage Bankers Association said last week. The seasonally adjusted index of refinancing applications increased 0.5 percent, while loan requests for home purchases fell 0.2 percent.