U.S. stocks finished near lows of the session Tuesday, reversing earlier gains as an early rally in financial, tech and energy stocks fizzled amid tough talk from President Donald Trump on North Korea.

The Dow Jones Industrial Average DJIA, -0.87% snapped a streak of nine sessions of record closes, finishing down 33.08 points, or 0.2%, at 22,085.34, led lower by shares of Merck & Co. MRK, +0.19% , DuPont DD, -2.43% and Nike Inc. NKE, -1.46% .

The S&P 500 index SPX, -1.11% rose 5.99 points , or 0.2%, to finish at 2,474.92, with 10 out of 11 of the index’s sectors declining, with materials, telecom and real estate the largest decliners. The financials sector, which had been up 0.8% earlier, finished down 0.2%.

The Nasdaq Composite Index COMP, -1.07% declined 13.31 points, or 0.2%, to close at 6,370.46.

After a session of trading between gains and losses, stocks sunk toward session lows after Trump told reporters North Korea would be met with “fire and fury like the world has never seen” should it continue to threaten the U.S. That followed reports earlier in the day that North Korea has successfully miniaturized a nuclear warhead that could fit inside a missile.

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While recent market action has had a modest upside bias, the moves have been muted; by one metric, this is the quietest market since 1965. The S&P 500 hasn’t had a session where it moved 0.5% in either direction since July 19, an abnormally long time. The CBOE Volatility index VIX, -2.38% , which was up 4% at 10.34, still traded near its all-time lows.

“In the overall market there’s no supply,” said Ian Winer, head of the equities division at Wedbush Securities. “As stocks go up, a lot of the index funds take the big winners and it’s a self-fulfilling prophecy.”

While stocks grind higher, plenty of investors are looking for a pullback that never seems to come. Including today’s session, the S&P 500 has gone 281 trading days without a pullback of 5% or more.

In addition to heightened tensions with North Korea, Winer said there are plenty of reasons for a possible pullback out there — central banks becoming more aggressive at tightening than expected, or reality setting in that 3% GDP growth isn’t going to happen — but for now, markets are complacent with the upward momentum.

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Earlier, financials had been the day’s biggest gainers, but the sector cooled off by mid-afternoon. Among the top-performing stocks in the industry were Fifth Third Bancorp FITB, -0.59% , up 1.4%, while Capital One Financial COF, -0.25% advanced 0.4%. J.P. Morgan Chase & Co. JPM, -0.21% shares finished down 0.4%, after an earlier gain of more than 1%.

Investors have become increasingly bullish on the group. Wells Fargo on Monday reiterated that it was one of four sectors — along with consumer discretionary, health care and tech — that “currently appear poised for the biggest outperformance.”

Separately, Oppenheimer noted that the group had been “the top-performing sector against falling interest rates since May, when the 10-year U.S. Treasury yield peaked at 2.4%,” adding, “We view positive reactions to bearish information as a sign that the bad news has been discounted and the underlying asset is primed to rally.”

Goldman Sachs listed five reasons why portfolio managers were “ignoring the micro story” of financials, suggesting that even though they are the top-performing sector over the past 12 months — up more than 30% — they still had room to grow.

The reasons include their trading at a relative valuation discount, deregulation tailwinds that weren’t priced into shares, and increases in both buybacks and dividends, which the investment bank said would rise at three times the pace of the overall S&P 500.

Individual movers: Shares in Avis Budget Group Inc. CAR, -5.00% fell nearly 10% after the car-rental company late Monday posted quarterly results that missed Wall Street’s expectations.

Marriott International Inc. MAR, -4.33% shed 2.1% after the hotelier posted a quarterly earnings beat, but guided profit for the current quarter slightly below analysts’ forecasts.

CBS Corp. US:CBS rose 1.8% after the media giant also reported results late Monday, with revenue topping expectations.

Drugstore operator CVS CVS, +1.98% posted earnings and revenue that beat estimates. Shares fell 0.7%.

Michael Kors Holdings Ltd. US:KORS soared nearly 22% as profit at the clothing and accessories company beat views. Ralph Lauren Corp RL, -3.72% jumped 13% on its own results.

“I don’t know that these companies have bright futures, but the results weren’t as dismal as many people thought,” Meyer said. “If expectations get low enough, you can beat them.”

Drugmaker Valeant Pharmaceuticals International Inc. US:VRX gained 1.8% as its quarterly revenue topped forecasts.

Dairy giant Dean Foods Co. US:DF plummeted nearly 21% after its earnings disappointed, while theme park operator SeaWorld Entertainment Inc.’s SEAS, -1.11% revenue missed views and saw its shares fall 6.3%.

Economic news: Sentiment among small-business owners jumped in July, the National Federation of Independent Business said early Tuesday.

Meanwhile, the Labor Department reported on Tuesday that the number of job openings in June vaulted to 6.16 million from 5.7 million in May.

Check out:MarketWatch’s Economic Calendar

Other markets:Oil futures US:CLU7 reversed earlier gains and settled down 0.5% at $49.17 a barrel while gold settled down 0.2% at $1,262.60 an ounce. A key dollar index DXY, +0.03% was 0.4% higher.

European equities SXXP, -0.66% finished slightly higher Tuesday, brushing off disappointing trade data from Germany and China. Asian markets closed mostly lower.

—Victor Reklaitis in London contributed to this article.