"We've started to get a little choppy since the end of May," noted John Fox, co-manager of the FAM Value Fund. "There's change in the wind and it's not the same market as before: Volatility's increased in the last couple of days, economic data's been a mixed bag and the momentum in the market's changed."
Intraday swings have increased in last few weeks as investors continue to question when the Fed may curtail its bond-buying program.
Most recently, Kansas City Fed President Esther George, reiterated her support for tapering the bond-buying program and said slowing down QE3 would help wean financial markets off their dependence on ultra-easy money from the central bank.
Investors will be monitoring Japan's Prime Minister Shinzo Abe' sspeech on growth strategy on Wednesday. Separately, a report from the Nikkei that there is growing speculation that the the Bank of Japan will soon be left with no room to purchase REITs. The report also said many investors are hoping the BoJ raises the ceiling at its two-day policy meeting starting Monday.
In addition, the monthly government employment data on Friday will be closely watched as the report is a key factor for the Fed's decision on monetary policy. Economists surveyed by Reuters expect to see a gain of 170,000 jobs, slightly higher than the 165,000 jobs added in April.
Stocks in Asia closed mixed, with Japanese equities still volatile after the dollar-yen fell below the key 100-mark. However, European markets were higher, boosted by data showing a decline in unemployment numbers in Spain.
(Read More: Traders Debate Fed Moves While Japan in Focus)