Johnson & Johnson also reported mixed quarterly results which sent its shares dropping more than 3 percent. Video-streaming firm Netflix posted better-than-expected earnings, but its guidance fell short of estimates.
Bank of America, meanwhile, reported strong first-quarter results with almost every single metric meeting or topping analyst expectations.
The three major indexes snapped a three-day losing streak on Monday, with the Dow rising more than 180 points, albeit during the lightest trading volume day of the year following the Easter holiday.
"I think this market is trapped in a range and I still think there's some unfinished business to the downside," said Baird's Bittles.
Investors also remained cautious as U.S.-North Korea tensions lingered. Vice President Mike Pence reassured Japan of American commitment to reining in North Korea's nuclear and missile ambitions on Tuesday, after warning that U.S. strikes in Syria and Afghanistan showed the strength of its resolve.
Pence arrived in Tokyo from South Korea, where he assured leaders of an "iron-clad" alliance with the United States in the face of the reclusive North, which has conducted a series of missile and nuclear tests in defiance of U.N. sanctions.
U.S. Treasury prices rose, sending the benchmark 10-year note yield down to about 2.17 percent while the short-term two-year note yield slipped to 1.165 percent.
Investors also kept an eye on France, as campaigning ramped up ahead of the first round of the presidential election. Left-wing candidate Jean-Luc Melenchon's surge in polls added to investors' worries as it becomes unclear who will win the contest.
European equities fell broadly after UK Prime Minister Theresa May called for a snap election in June. The announcement also sent the British pound for a loop. The currency rose more than 2 percent to $1.284 after briefly falling more than 1 percent.
"No one was expecting this. Not least because the government itself ruled an election before 2020 out barely four weeks ago. But Theresa May has clearly smelt an opportunity to consolidate her mandate ahead of the Brexit negotiations," said Luke Bartholomew, investment manager at Aberdeen Asset Management.
In economic news, housing starts fell 6.8 percent last month, more than the expected 3.9 percent decline. Industrial production rose 0.5 percent last month, in line with expectations.
The Dow Jones industrial average fell 113.64 points, or 0.55 percent, to close at 20,523.28, with Goldman Sachs leading decliners and Coca-Cola the top advancer.
The S&P 500 dropped 6.82 points, or 0.29 percent, to end at 2,342.19, with health care leading six sectors lower and consumer staples the biggest riser.
The Nasdaq pulled back 7.32 points, or 0.12 percent, to close at 5,849.47.
Decliners were a step ahead of advancers at the New York Stock Exchange, with an exchange volume of 762.43 million and a composite volume of 3.262 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 14.4.
—CNBC's Juan Aruego and Reuters contributed to this report.
On tap this week:
Earnings: BlackRock, Morgan Stanley, American Express, eBay, Morgan Stanley, US Bancorp, TD Ameritrade, Textron, CSX, Canadian Pacific Railway, Qualcomm, Abbott Labs, Steel Dynamics, SLM
2:00 p.m. Beige book
Earnings: Travelers, Verizon, Blackstone, Philip Morris, ABB, Bank of NY Mellon, Alliance Data, PPG Industries, Imax, MGIC Investment, KeyCorp, Nucor, Janus, Visa, Sonoco Products, Sherwin-Williams, Mattel, NCR, Danaher
8:30 a.m. Weekly claims
8:30 a.m. Philadelphia Fed
Earnings: General Electric, Honeywell, NextEra Energy, Kansas City Southern, Schlumberger, Rockwell Collins, Stanley Black and Decker, SunTrust, Morningstar, Steve Madden
9:45 a.m. Manufacturing PMI
10:00 a.m. Existing home sales
Watch: Goldman deputy CFO on earnings miss