U.S. stocks fell Tuesday after Federal Reserve Chair Jerome Powell told Congress that interest rates are likely to go "higher" in the face of persistent inflation.

At the closing bell on Tuesday, the benchmark S&P 500 (^GSPC) fell 1.5%, the Dow Jones Industrial Average (^DJI) sunk 1.7%, and the Nasdaq Composite (^IXIC) plummeted 1.2%.

Tuesday's losses saw the S&P 500 fall by the most in two weeks and trade back below the key 4,000 level. The index also broke its 50-day moving average, an indicator traders closely watch for signs stocks are breaking from recent trends.

"Fed Chair Jerome Powell confirmed today that interest rates are set to rise higher than we previously anticipated," wrote Andrew Hunter, deputy chief U.S. economist at Capital Economics. "But with most evidence still pointing to economic weakness and markedly lower inflation this year, we still believe the Fed will begin cutting rates again sooner than markets are expecting."

Powell delivered the first of his two days of semi-annual testimony to Congress on Tuesday, speaking before the Senate Banking Committee ahead of Wednesday's appearance before the House Financial Services Committee. In his prepared testimony released Tuesday, Powell spoke of a sustained central bank campaign to rein in inflation.

"The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated," Powell said. "If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."

Answering questions from lawmakers, Powell said the full impacts of the Fed's interest rate increases haven't yet been felt in the economy.

Markets have begun to price in at least two additional 0.25% rate hikes from the central bank over its next two meetings; investors began the year with optimism the Fed would stop its rate-hiking campaign as soon as February.

Powell's comments Tuesday opened the door to the possibility of both a higher terminal federal funds rate, as well as a higher pace of increases. According to data from CME Group, Powell's comments spurred traders to price in a higher chance of a 0.50% hike than a 0.25% increase later this month.

The Fed will kick off its next two-day policy meeting in two weeks, with a policy announcement set for the afternoon of March 22.

Elsewhere in markets, WTI crude oil was under pressure, falling more than 3.7% to around $77.40 per barrel. The 10-year Treasury yield, which has been a focal point of market action over the last few weeks, was little-changed, settling near 3.98%.

On the earnings side, results from Dick's Sporting Goods (DKS) early this morning sent shares of the sporting goods retailer higher by 11%.

The company offered full-year earnings per share guidance that came in more than $1 per share above expectations, according to Bloomberg data. Dick's expects to earn $12.90-$13.80 per share in its fiscal 2023, up from the $12.04 the company earned last year.

Same-store sales in the company's fourth quarter rose 5.3% with CEO Ed Stack telling investors the company's inventory levels are in "great shape" to start 2023.

Elsewhere in single-stock moves, shares of Snap (SNAP) gained more than 9% on Monday — and had been up as much as 4% on Tuesday before paring gains to close up just 0.5% — with Bloomberg attributing the rally to optimism over a TikTok ban in the U.S.

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