Stocks fell Tuesday as more pressure on the U.S. banking sector weighed on the broader market. The Dow Jones Industrial Average dropped over 350 points, while the S&P 500 and Nasdaq Composite both lost roughly 1.2% each.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  ): -1.16% or -51.86 points to 4,437.86

Dow Jones Industrial Average (DIA  ): -1.02% or -361.24 points to 34,946.39

Nasdaq Composite Index (QQQ  ): -1.14% or -157.28 points to 13,631.05

Financial stocks were impacted again on Tuesday as Fitch warned it may downgrade the credit rating of dozens of U.S. banks, including the country's largest bank by multiple factors JPMorgan Chase (JPM  ), according to a CNBC report. The agency previously lowered its rating on the financial industry in June, with another possible downgrade impacting the ratings of more than 70 banks.

Fitch's warning comes a week after Moody's lowered its rating for 10 U.S. banks and put other financial institutions on a watchlist for downgrades.

Also in the spotlight, U.S. retail sales rose at a higher-than-expected rate in July, the Commerce Department reported Tuesday, demonstrating continued consumer strength. The report showed a seasonally adjusted increase of 0.7% for the month, and a 1% rise when excluding auto sales -- both readings marking the best monthly gains since January.

July's reading was driven by a 1.9% increase in spending at online retailers, most likely boosted by Amazon's (AMZN  ) Prime Day sales event, while sporting good and related stores climbed 1.5% higher and food service and drinking places spending also rose 1.4%.

On the earnings front, Home Depot (HD  ) reported better-than-expected earnings results Tuesday, marking the first time in three quarters the home improvement retailer topped analysts estimates. Home Depot, however, reiterated its forecast for the year despite its strong report, expecting sales and comparable sales to decline in a range of 2% and 5% compared with the previous year.

CFO Richard McPhail told investors during a call Tuesday that "the homeowner customer -- who is really our customer -- remains healthy and remains engaged in home improvement."

Elsewhere, shares of D.R. Horton (DHI  ) rose higher after a Securities and Exchange Commission (SEC) filing revealed Berkshire Hathaway (BRK.A  ) added a stake in the home construction company worth more than $700 million. Warren Buffett's conglomerate also purchased $70 million worth of NVR (NVR  ) shares and $17.2 million worth of Lennar (LEN  ) in the second quarter.

Evercore ISI analyst Stephen Kim wrote in a note to client that Berkshire's bet on several homebuilders could highlight the strong fundamentals of the industry.

"We believe builders that pursue an asset-light approach could eventually be revalued higher, as the market rewards their through-cycle returns and low leverage. In that light, we regard this investment by BRK as a helpful vote of confidence in a potential revaluation of the large-cap homebuilders," Kim wrote.

Discover Financial Services (DFS  ) shares fell after the financial services company announced its CEO Roger Hochschild has resigned from his position, effective immediately. The company's board has appointed John Owen as interim president and CEO, with Hochschild remaining as an advisory through the end of the year.

For Wednesday, investors will react to earnings reports from retailers including Target (TGT  ) and TJX Companies (TJX  ) in the morning, as well as minutes from the Federal Reserve's recent policy meeting slated to release in the afternoon.