Stocks traded choppily on Tuesday as worries over global economic growth weighed on investor risk sentiment and market participants looked for clues on the health of the U.S. economy as the second quarter earnings season begins. The Dow Jones Industrial Average dropped nearly 200 points, while the S&P 500 and Nasdaq Composite slipped nearly 1% each.

Meanwhile, oil prices fell sharply on Tuesday as China's renewed COVID restrictions dented demand outlooks and raised fears of a global economic slowdown. West Texas Intermediate (USO  ) crude futures fell nearly 8% to $95.84 per barrel, while international benchmark Brent Crude (BNO  ) crude futures fell 7% to $99.49 per barrel.

This week marks the start of the Q2 earnings season, with PepsiCo (PEP  ) being the first major company to report results before market open on Tuesday. The beverage and snack giant posted better-than-expected quarterly profit and revenue and raised its revenue outlook for the year. Other major companies like JPMorgan Chase (JPM  ) and Delta Air Lines (DAL  ) are set to report later this week.

Market participants are looking for signs that inflationary pressures and rising interest rates could be impacting company profit outlooks, especially as many fear the economy is heading towards a recession. Investors are also bracing for more inflation data for June, with the month's CPI report due Wednesday.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  ): -0.92% or -35.63 points to 3,818.80

Dow Jones Industrial Average (DIA  ): -0.62% or -192.51 points to 30,981.33

Nasdaq Composite Index (QQQ  ): -0.95% or -107.87 points to 11,264.73

Microsoft announces small job cuts for fiscal 2023:

Microsoft (MSFT  ) said Tuesday it has cut a small number of positions as its begins its 2023 fiscal year. The job cuts extend across a variety of departments and affect less than 1% of the company--which employed 181,000 people as of June 2021--the company said.

"Today we notified a small number of employees that their roles have been eliminated," a company spokesperson told CNBC. "This was a result of a strategic realignment, and, like all companies, we evaluate our business on a regular basis. We continue to invest in certain areas and grow headcount in the year ahead."

Across the sector, tech companies have slowed hiring or announced jobs cuts in recent months ahead of a possible economic recession. That shift has led investors to avoid growth-oriented stocks like Microsoft, whose shares are down over 24% for its year-to-date.