Dow slides more than 200 points as Walmart shares tank 9%

The Dow Jones industrial average fell sharply on Tuesday after Walmart shares dropped on the back of weaker-than-expected earnings.

As of 10:35 a.m. ET, the 30-stock index had pulled back 215 points. Walmart was by far the biggest decliner in the Dow, shedding more than 9 percent.

The S&P 500, meanwhile, slipped 0.4 percent, with consumer staples dropping 1.8 percent. The broad index was also pressured by interest rates trading near multi-year highs.

The benchmark 10-year U.S. note yield rose to 2.899 percent, after hitting its highest level since 2014 last week. The short-term two-year note yield, meanwhile, traded around a nine-year high.

Higher rates have kept Wall Street on edge recently as investors fear higher inflation could lead the Federal Reserve to tighten monetary policy faster than expected.

The S&P 500 experienced a 10.2 percent pullback between Jan. 26 and Feb. 8, losing $2.5 trillion in value, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. As of Friday's close, the broad index had regained $1.3 trillion, Silverblatt said in a note.

"The equity markets snapped back from a deeply oversold condition last week," Bruce Bittles, chief investment strategist at Baird, said in a note to clients. "At this juncture, the 10% decline from the January high is seen as a normal correction in an ongoing secular bull market."

"Although the economic fundamentals suggest the correction has run its course, the technical indicators leave open the potential for a retest of the recent lows," Bittles said. "Excessive investor optimism that was pervasive in January has been replaced with caution and skepticism but there is a lack of evidence that fear has entered the building, which is often found at a good market low."

U.S. markets reopened Tuesday after a long holiday weekend. In the previous session, the S&P 500 ended its best week since 2013. But stocks closed off their highs Friday, as developments in the U.S. political space unfolded.

On Friday, the office of U.S. Special Counsel Robert Mueller indicted 13 Russian nations and three entities from Russia for alleged illegal interference in the 2016 presidential election.

The defendants allegedly conducted "information warfare" against the U.S. to "sow discord" into its political system through the use of fictitious personas and online platforms such as social media. The Kremlin has since said here was no significant evidence of meddling from Russia in the 2016 presidential election but provided no further information.

In corporate news, Walmart reported adjusted quarterly earnings of $1.33 per share, missing an estimate of $1.37. The company also reported a 23 percent drop in e-commerce revenue.

Meanwhile, Home Depot released quarterly results that surpassed analyst expectations, lifting the Dow component by 0.6 percent.

—CNBC's Dan Mangan and Mike Calia contributed to this report

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