Wall Street returned from the long Independence Day weekend to find worries over Brexit again gaining traction.

The S&P 500 was down 0.69%, the Dow Jones Industrial Average fell 0.61%, or 140 points, and the Nasdaq declined 0.82%.

Uncertainty over the timeline and execution of the United Kingdom's exit from the European Union left markets rattled on Tuesday. The reaction was the polar opposite to a rally last week which stemmed from speculation the Brexit would delay a rate hike in the U.S. and increase the chances of monetary stimulus from global central banks. 

Dovish commentary from the U.K.'s central bank, however, resurrected fears the Brexit would have a far worse impact on the global economy than the market reaction had accounted for. 

The Bank of England said Tuesday it would reduce the amount of capital banks need to hold to free up more money for lending to businesses and households. Bank of England Gov. Mark Carney said that the central bank has the scope to deal with Article 50, which will kick off Britain's exit, when it is invoked.

"The Bank of England is making strenuous efforts to reassure the markets that it can provide ample liquidity and relax monetary policy to counter some of the effects of the Brexit uncertainty shock on the economy," Societe Generale analysts wrote in a note.

Crude closed at its lowest in just over a week on worries the economic repercussions of turmoil in Europe could dampen demand for oil.

The commodity was also under pressure as Nigerian production rebounded in June, pushing total output from the Organization of Petroleum Exporting Countries to its highest level since January. A Bloomberg survey showed OPEC production increasing by 240,000 barrels a day in June.

"The increase in OPEC production threatens to postpone the anticipated rebalancing of the global market," said Timothy Evans, energy futures analyst at Citi.

West Texas Intermediate crude oil dropped 4.6% to $46.73 a barrel.

The energy sector was the worst performer on markets on Tuesday. Major oilers including Exxon Mobil (XOM - Get Report) , PetroChina (PTR - Get Report) , Total (TOT - Get Report) and Royal Dutch Shell (RDS.A - Get Report) were falling. The Energy Select Sector SPDR ETF (XLE - Get Report) slid 2.5%.

The Federal Reserve sounded a dovish call following its June meeting, the minutes of which will be released on Wednesday afternoon. The number of Fed officials who expect to see just one rate hike this year rose to six members in June, up from just one official in its previous April meeting.

"The dynamics underpinning Fed policy have been overtaken by the post-Brexit events, making the June FOMC minutes somewhat stale," said James Rossiter, vice president and senior global strategist at TD Securities. "Nevertheless, we expect the tone to be dovish, reflecting a greater awareness among Fed officials about the negative feedback loop from global events."

U.S. factory orders in May declined at a faster pace than expected. Orders declined 1%, according to the Census Bureau, a wider decline than an expected 0.8%. Orders have slowed since a 1.8% increase in April.

Harley-Davidson (HOG - Get Report) slid 10.8%, giving back much of the gains achieved on Friday. Shares had surged on speculation of a possible takeover deal from private-equity firm KKR in the pipeline.

Delta (DAL - Get Report) cut its profit margin forecasts for its June quarter. The airline pointed to a 5% decline in passenger revenue in June and the higher cost of fuel as reason for the weaker-than-expected quarter.

Tesla (TSLA - Get Report) fell 1.2% after releasing a second-quarter sales update that fell well short of company estimates. The electric car company said it produced 18,345 vehicles in the second quarter of 2016, a 20% increase from the previous quarter. However, a late-quarter production increase meant deliveries reached only 14,370 vehicles, below an expected 17,000.