Stocks fell Tuesday as fresh economic data showed continued U.S. economic strength, raising concerns that the Federal Reserve may not cut interest rates later this year. The Dow Jones Industrial Average dropped over 170 points, while the S&P 500 Index and Nasdaq Composite lost 1.1% and 1.9%, respectively.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  2.07%): -1.11% or -66.34 points to 5,909.04

Dow Jones Industrial Average (DIA  1.61%): -0.42% or -178.20 points to 42,528.36

Nasdaq Composite Index (QQQ  2.42%): -1.89% or -375.30 points to 19,489.68

Moving Markets:

The U.S. Services Sector grew at a faster-than-expected rate in December, the Institute for Supply Management reported Tuesday, dashing some hopes for further rate cuts from Fed policy makers this year. The ISM services purchasing managers' index advanced 2 points to 54.1, with reading above 50 indicating expansion.

"General optimism expressed across many industries, but tariff concerns elicited the most panelist comments," said Steve Miller, chair of the Institute for Supply Management Services Business Survey Committee, in a statement.

In the News:

Getty Images (GETY  2.00%) and Shutterstock (SSTK  0.72%) announced a merger on Tuesday of the two digital stock image databases under the name Getty and to be led by Getty Images CEO Craig Peters. The combined company, which will continue to trade on the New York Stock Exchange under the symbol "GETY," will have an enterprise value of $3.7 billion, according to the release.

Getty said the combined database and company allows for "greater investment in innovative content creation, expanded event coverage, and customer-facing technologies and capabilities such as search, 3D imagery and generative AI."

Ulta Beauty (ULTA  13.68%) increased its fourth-quarter outlook late Monday following the beauty retailer's stronger-than-expected holiday season. The company also announced CEO Dave Kimbell will retire, to be succeeded by current President and COO Kecia Steelman.

Despite the leadership change, JPMorgan analysts still see Ulta as one of its "top picks" and reiterated their $430 price target, as its raised outlook signaled the company wants to "make sure that investors clearly understood that the CEO change had nothing to do with Q4 performance," the analyst wrote in a Monday note.

UBS analyst Erika Najarian upgraded Bank of America (BAC  3.08%) shares to Buy from Neutral, and lifted the stock's price target to $53 from $43, believing the bank if an "overlooked" winner for 2025.

"In the post-election landscape of de-regulation and higher for longer, BAC has been largely left out of the conversation. We think the Street had not yet recalibrated EPS power from higher rates gro longer," Najarian wrote.

Bernstein analyst Aneesha Sherman upgraded shares of Lululemon Athletica (LULU  0.44%) to Outperform -- its first ever -- on Tuesday, with the firm's price target implying a potential upside of 16% for the athleisure retailer.

"After a tough year of growth deceleration and multiple compression, we believe the Americas business has bottomed and is now set up for a modest recovery," Sherman wrote in a Tuesday note. "Meanwhile, the China business continues to rapidly grow in the mix, and over the next two years will become a meaningful tailwind to growth and margins."

For Wednesday:

Market participants will turn their attention towards ADP's employment report for December due out Wednesday morning, as well as minutes from the Fed's December FOMC meeting in the afternoon.