A downpour of data shook up investor sentiment on the second trading day of the week.
October Chicago PMI came in at 66.2, up from a September reading of 65.2. As a leading indicator of the U.S. economy, the PMI helps economists measure business activity and new orders.
Meanwhile, consumer confidence remained strong with at 125.9, its the highest level since December 2000. The strong consumer confidence and PMI data hint at growing positive results and corresponding sentiment in the economy. Such economic success will likely factor into the Fed's decision-making as 2018 nears a close.
In the central bank sphere, the Federal Open Market Committee's two-day meeting began Tuesday with an interest rate decision set to be announced Wednesday.
Investors will be paying close attention to this event, to see if they can garner any information about how the U.S. economy is currently performing.
Meanwhile, White House officials told CNBC Monday that President Donald Trump was expected to name his choice for the next chair of the U.S. Federal Reserve on Thursday, ahead of his trip abroad this weekend.
Sticking with central banks, the Bank of Japan said Tuesday that it would be holding fire from changing its monetary policy stance, stating that it was maintaining its short-term interest rate at minus 0.1 percent and the target for its 10-year government bond yield would stay at 0 percent.
Turbulence in the U.S. political space is expected to shake up sentiment Tuesday. On Monday, former Trump campaign chairman Paul Manafort was ordered to be placed under house arrest, following his "not guilty" plea in response to a 12-count indictment in federal court, linked to foreign lobbying contracts and money laundering.
Court filings released Monday revealed that George Papadopoulos, an advisor to President Trump's campaign, had pleaded guilty earlier in October for making incorrect statements to FBI agents about his encounters with Russian nationals.
—CNBC's Christina Wilkie and Yen Nee Lee contributed to this report