Ukraine President Petro Poroshenko has accused Russia of "direct and undisguised aggression", while his Russian counterpart, Vladimir Putin, said Kiev had refused to engage in political talks with the separatists, Reuters reported. NATO said on Monday it would create a "spearhead rapid reaction force" to respond to the crisis.
Read MoreSlideshow: Key geopolitical risks to watch after the summer
"Equity markets still seem to be failing to price in the tail risk of a further deterioration on this front," Rabobank's Every added.
It comes after the S&P 500 closed at another record finish on Friday, as investors welcomed a better-than-expected read on U.S. consumer confidence. The Thomson Reuters/University of Michigan's final take on consumer sentiment rose to 82.5 in August from 81.8 the month before.
Read MoreEurope shares higher; data, Ukraine in focus
On Tuesday, data due include the ISM manufacturing index and construction spending, both at 10 a.m. ET.
Daiwa Capital Market economists said the manufacturing ISM would be in focus, "but in marked contrast to the weakness reported in the various manufacturing PMI surveys across Europe that month, the headline index is expected to be unchanged at a still-healthy 57."
Data for the euro zone published Monday, revealed that manufacturing output in the euro zone slipped in August, coming in below expectations. It comes just days ahead of the European Central Bank's (ECB) policy meeting on Thursday, with a growing number of economists expecting President Mario Draghi to announce more stimulus measures in an effort to bolster the region's economy.
Read MoreAs ECB looms, we're already in the red zone
"Markets are now in such a state of anticipation about what the ECB might do this Thursday (cut rates, increase bond purchases, unveil a 'proper' QE program?) that the risk of disappointment is clear," Societe Generale's Kit Juckes wrote in a note on Tuesday. "Mr Draghi's Jackson Hole comments point to increased concern, but the hurdles to stronger action haven't vanished and the ECB remains a slow-moving organization."
Shares of Conn's fell sharply in early New York trading after the furniture and appliance retailer cut its full-year outlook.