U.S. stocks finished lower Tuesday as a persistent slump in oil prices put pressure on energy shares, while investors were also making guarded moves as the Federal Reserve’s two-day Federal Open Market Committee meeting got underway.

Meanwhile, a winter storm bearing down on New York City cut into trading volumes, with thousands of flights canceled across parts of the East Coast and a state of emergency declared for the city itself.

The S&P 500 index SPX, -0.84% closed down 8.02 points, or 0.3%, at 2,365.45, with 10 of the 11 main sectors finishing lower. The energy sector led the declines, falling 1.1%, while materials and industrials shares finished down 0.9% and 0.8%, respectively. Oil prices US:CLJ7 dropped 1.4% to settle at $47.72 a barrel as an OPEC report showed production from its largest member, Saudi Arabia, is increasing. Consumer-discretionary shares were the only gaining sector, finishing up less than 0.1%

The Dow Jones Industrial Average DJIA, -0.46% finished down 44.11 points, or 0.2%, at 20,837.37, with Chevron Corp. CVX, +0.29% and General Electric Co. GE, +4.44% shares leading losses with respective 1.8% and 1.1% declines.

The Nasdaq Composite Index COMP, -1.26% shed 18.97 points, or 0.3%, to close at 5,856.82. The main indexes are still only a few percentage points below their all-time highs.

Small-cap companies faced slightly greater pressure with the Russell 2000 RUT, -0.62% finishing down 0.6%, and at one point during the session the index was trading at a loss for the year to date.

Some analysts suggested the pullback in the stock market hasn't finished yet.

“Short-term momentum remains weak and short-term oversold conditions are not yet widespread enough to suggest a low is being established,” said Katie Stockton, chief technical strategist at BTIG.

The FOMC meeting kicked off early Tuesday, with the market seeing a 93% probability that the Fed will vote for an interest-rate increase, according to data from the CME Group.

The expected rate increase on Wednesday would be the first of likely three this year. Sahak Manuelian, managing director of equity trading at Wedbush Securities, said those three hikes are already priced in and that many traders are hanging back to wrap their heads around the market.

Read:Stock market bulls dismiss talk of ‘3 steps and a stumble’ as Fed rate hike looms

The U.S. central bank’s statement and new economic projections won’t be released until 2 p.m. Eastern on Wednesday, followed by a news conference hosted by Fed Chairwoman Janet Yellen. The FOMC’s policy statement will be examined for signals about the timing and pace of future interest-rate hikes.

Read: Fed’s on thin ice in a Trump administration, expert says

“People are stepping back a lot because of all the moving pieces this year,” Manuelian said, citing that apprehension more than bad weather has weighed upon volumes lately. One moving piece of concern is the release of the Congressional Budget Office’s review of the Republican bill to replace the Affordable Care Act, and how that will affect the health-care sector, which has rallied on par with the S&P 500 since the election.

On the data front, the National Federation of Independent Business reported early Tuesday that small-business owners’ optimism dipped in February, but stayed close to long-term highs. Separately, producer prices jumped in February by 0.3%, above consensus expectations of 0.1%, bringing year-over-year wholesale inflation to 2.2%. Higher inflation is one of the reasons the Federal Reserve is intent on raising interest rates.

Stocks to watch: Energy shares took a hit, following a drop in oil prices. Marathon Oil Corp MRO, +2.63% finished down 3.3%. Shares of Transocean Ltd. RIG, +2.77% fell 1.6%. The U.S. Oil Fund ETF USO, +1.84% finished at its lowest level in 4½ months, falling for a seventh straight session.

Shares of Valeant Pharmaceuticals International Inc. US:VRX tumbled 10% after Bill Ackman’s Pershing Square Capital Management said it has sold its 10% stake in the company amid mounting losses. Ackman himself plans to step down from Valeant’s board.

Over 5,000 flights were impacted by weather conditions on the East Coast. United Continental Holdings Inc. UAL, +0.14% shares were some of the worst performers on the S&P 500 Tuesday, with a 4.7% drop. United, American Airlines Group Inc. AAL, -1.23% , and Delta Air Lines Inc. DAL, -1.76% all issued travel alerts and began waiving rebooking fees for flights. Shares of airlines were down across the board.

Shares of Macy’s Inc. M, -1.71% closed up 0.2% after news that Canadian-based retailer Hudson’s Bay, which previously bid to buy Macy’s, is now in talks to buy upscale retailer Neiman Marcus.

Yahoo Inc. US:YHOO shares declined 0.4% after the company released details of a $23 million golden parachute for the planned exit of CEO Marissa Mayer after the company sells its core assets to Verizon Communications Inc. VZ, +0.36% .

Shares of automation software group Synopsys Inc. SNPS, -2.41% fell 1.8% after news the company will enter the S&P 500 after the open of trade on Thursday.

Trump plans to meet China's Xi Jinping at Mar-a-Lago

Other markets: Asian stock markets were mixed, while European stocks SXXP, -0.50% finished lower.

The pound GBPUSD, -0.08% tapped its lowest levels against the dollar since earlier this year — trading around $1.2152 after British lawmakers on Monday passed a bill that will allow the Brexit process to begin. The pound also tumbled against the yen GBPJPY, -0.01% and the euro GBPEUR, -0.10% . The U.S. Dollar Index DXY, -0.07% was 0.4% higher, while the 10-year Treasury yield TMUBMUSD10Y, 0.682% declined 3 basis points to 2.595%.

Gold prices US:GCM7 declined 50 cents to settle at $1,202.60 an ounce.

—Barbara Kollmeyer in Madrid contributed to this report.