Wall Street tumbles 1%, with S&P 500 wallowing at June lows

US stock indices fell on Tuesday as investors continue to sell off high-risk assets ahead of more data that will shed light on the Federal Reserve's monetary policy path. 

Investors await important negotiations in Washington this week, which hopefully could prevent a government shut down in October if Congress passed the spending bill.

Moody's recently warned that a US government shutdown will hurt its credit rating, one month after Fitch's Rating Agency cut the US credit rating by a degree due to the debt ceiling crisis.

Investors also await important US personal spending data, crucial for gauging inflation, in addition to a speech by Fed Chair Jerome Powell.

Wall Street was pressured as US 10-year treasury yields surged to 2007 highs on expectations the Fed might raise interest rates once more this year.

On trading, Dow Jones fell 1%, or 330 points to 33,679, while S&P 500 fell 1.2%, or 51 points to 4285, as NASDAQ declined 1.2%, or 164 points to 13,107.