Just when the Federal Reserve prepares to reduce interest rates next week, Wall Street placed its thumb squarely on the scale with a big day of stock losses on Tuesday.

The markets were led lower largely by tech stocks, specifically the producers of semiconductor chips. Nvidia lost 9.5% and Intel dropped by 9% to lead a massive decline for chipmakers.

The markets suffered major losses after the Labor Day weekend that saw the Dow Jones Industrial Average post another record-high. The Dow's record was short lived as the indices lost 626.15 points (1.51%).

But the bigger losers by percentage were the Nasdaq Composite, which declined by 577.33 points (3.26%) during a brutal session for tech stocks. The S&P 500 fell 119.47 points (2.12%).

"The market right now seems to be very jumpy to any data that comes in," Blue Chip Trend Report chief technical strategist Larry Tentarelli told CNBC. "We've become a very data-dependent market."

The Fed is expected to make the long-awaited announcement Sept. 10 that it will begin cutting interest rates from 23-year record highs. But Tuesday's session raises questions about exactly how solid the ground is for investors.

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