This story was updated at 4:05 p.m. EDT.

Wall Street fell sharply on Tuesday as investors took gains off the table after a recent rally and ahead of an upcoming quarterly reporting season that is expected to reveal sharply lower earnings.

At the close of trading, the Dow Jones Industrial Average was down 134 points, or 0.8 percent, at 17,603, while the broader Standard & Poor's 500 lost 21 points, or 1 percent, and finished at 2,045.

The Nasdaq Composite dropped 48 points, or 1 percent, to 4,844.

"In front of earnings season you have people pulling back a little bit and trying to consolidate what they have," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

As S&P 500 companies hand in their first-quarter reports over the next several weeks, average earnings are expected to fall 7.1 percent from the year-ago period, with the energy sector weighing most heavily, according to Thomson Reuters data.

Reflecting concerns on Wall Street, International Monetary Fund Managing Director Christine Lagarde on Tuesday warned of increasing risks to global economic growth unless policymakers take stronger measures.

Lagarde's comments come a week after Fed Chair Janet Yellen urged caution on rate hikes, citing a shaky global economy and low oil prices.

Oil steadied near one-month lows after Kuwait said an output freeze by top producers would proceed without Iran.

Data on Tuesday showed the U.S. trade deficit widened more than expected in February, while another report showed services sector activity rose in March.

Among the 10 major S&P sectors, the interest rate-sensitive utilities sector fell the most.

The S&P financials sector dropped, led by Wells Fargo, while Goldman Sachs was a significant drag on the Dow.

Allergan shares fell some 15 percent after the U.S. Treasury unveiled rules to curb tax inversion deals, potentially derailing the drugmaker's merger with Pfizer. Pfizer climbed 2 percent.

Allergan was the biggest negative influence on the S&P 500.

Disney was another big drag on the Dow after the media company said a veteran executive, who was tipped to be its next CEO, would step down.

Data from Reuters were used to report this story.