Stocks fell on Tuesday as Wall Street paused its recent rally ahead of statements from Federal Reserve Chair Jerome Powell. The Dow Jones Industrial Average fell nearly 250 points, while the S&P 500 and Nasdaq Composite slipped about 0.5% and 0.2%, respectively.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  ): -0.47% or -20.88 points to 4,388.71

Dow Jones Industrial Average (DIA  ): -0.71% or -245.05 points to 34,054.07

Nasdaq Composite Index (QQQ  ): -0.16% or -22.28 points to 13,667.29

Markets were closed on Monday for the Juneteenth holiday in the United States. Wall Street is coming off a strong week, with the S&P 500 reaching its highest level since April 2022, and the broader market index and tech-heavy Nasdaq posing their best weekly performances since March. It was also the S&P 500's fifth straight week of wins and the Nasdaq's eighth consecutive positive week.

Morgan Stanley's Mike Wilson said Tuesday that stocks have overextended themselves in recent weeks due to enthusiasm towards artificial intelligence and fiscal support boosting markets, with the firm believing "equity markets are as stretched as they can get with market participants wary of missing a potential new bull market," according to Wilson's note.

Heading into Tuesday, market participants are looking ahead towards Powell's two-day testimony before Congress that starts Wednesday. The central bank has forecasted for two more quarter-point interest rate hikes later this year, with investors looking for clues for the Fed's next decision in July.

On the economic front, U.S. housing starts came in at a stronger-than-expected rate in May, according to the Commerce Department on Tuesday. New construction grew 21.7% over April to a 1.63 million annualized rate last month, with 1.49 million new building permits issued. Starts rose 5.7% year-over-year.

Elsewhere, Rivian (RIVN  ) shares rose on Tuesday after the electric carmaker announced a deal with Tesla (TSLA  ) to use it's electric vehicle charging ports, allowing drivers access to more than 12,000 Tesla superchargers across the U.S. and Canada starting next year.

The announcement comes after Tesla reached similar deals with General Motors (GM  ) and Ford (F  ), propping Tesla's charging network to potentially become the industry standard.

Alibaba (BABA  ) shares fell after the China e-commerce giant announced CEO Daniel Zhang is departing from his position to be replaced by co-founder Eddie Wu. The leadership change comes as the company issued a restructuring of its business into six different arms back in March.

Eli Lilly (LLY  ) announced Tuesday the pharmaceutical giant has agreed to buy Dice Therapeutics (DICE  ) in a $2.4 billion cash deal. That deal price of $48 per share represents a 42% premium from Dice's closing price on Friday. Dice's lead development is an experimental pill to treat psoriasis.

Looking ahead, market participants will react to testimony from Fed Chair Powell as well as a quarterly report from FedEx (FDX  ) after Tuesday's closing bell.