Wall Street's main indexes were down about a third of a percent on Tuesday, falling for the first time in three sessions as caution crept in ahead of crucial data on inflation, which has been the root cause of the recent sell-off.
A strong reading on U.S. consumer price data on Wednesday could fan fears over rising inflation and faster interest rate hikes - the same worries that sparked the sell-off after strong jobs data on Feb. 2.
"I expect a continued stream of volatility, driven by uncertainty among investors with fears of accelerating rates. I don't think that's going away any time soon," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
Cleveland Fed president Loretta Mester, a voting member in the central bank's rate-setting committee this year, said inflation should gradually rise this year, but not at a rate that requires a faster Fed reaction in terms of raising rates.
She said the recent stock market sell-off and jump in volatility will not damage the economy's overall strong prospects.
After a wildly volatile week that pushed the market into correction territory, U.S. stocks gained roughly 3 percent over Friday and Monday, their best two-day gains since June 2016.
"We saw an impressive rebound yesterday but by no means are we in the clear," Bakhos said.
By 9:41 a.m. ET (1441 GMT), the Dow Jones Industrial Average was down 73.22 points, or 0.3 percent, at 24,528.05 and the S&P 500 was down 7.42 points, or 0.28 percent, at 2,648.58. The Nasdaq Composite was down 13.09 points, or 0.19 percent, at 6,968.87.
All the 11 major S&P indexes were lower, led by losses in technology and healthcare indexes.
Benchmark U.S. 10-year Treasury yields were hovering at 2.8475 percent, shy of their four-year peak of 2.9020 percent on Monday. [US/]
The CBOE Volatility Index, a widely-followed measure of short-term stock volatility, rose about 1 point to 26.70, but stayed well short of the 50-point level it touched last week.
The recent pullback has wiped out all of the year's gains for the benchmark S&P 500 and the blue-chip Dow, which are now down 1 percent and 0.9 percent, respectively, so far in 2018.
The tech-heavy Nasdaq was still clinging to a 0.87 percent gain for the year.
More than three-fifths of the companies on the S&P 500 have reported earnings, with nearly 78 percent of them topping profit expectations, according to Thomson Reuters data. That is above the 72 percent average beat-rate in the past four quarters.
Shares of Under Armour rose more than 15 percent after the sportswear maker reported quarterly revenue that beat analysts' estimates.
AmerisourceBergen jumped nearly 12 percent after the Wall Street Journal reported Walgreens made a takeover approach for the drug distributor. Walgreens rose 1.1 percent.
Declining issues outnumbered advancers on the NYSE by 1,830 to 714. On the Nasdaq, 1,697 issues fell and 684 advanced.