Meanwhile, European Central Bank President Mario Draghi said on Monday night that the central bank will not resort to "higher inflation rates" to resolve the euro zone debt crisis, and will only "intervene" in the bond markets in certain circumstances. His comments come as Germany's constitutional court began a two-day hearing on the legality of the ECB's bond-buying program, which has played a large role in calming financial markets.
On Monday, credit ratings agency Standard & Poor's upgraded its outlook for the U.S. to "stable," highlighting the relatively favorable growth outlook. Still, the stock market largely ignored the endorsement, with major averages closing near the flatline in choppy trading.
(Read More: Every Major Asset Class Is Overpriced: Analyst)
Lululemon Athletica plunged nearly 15 percent after the yoga apparel maker said its CEO Christine Day will step down.
Texas Instruments declined after the chipmaker released a second quarter outlook that confirmed its PC and notebook sales will be weak this quarter.
(Read More: Texas Instruments Prunes Its Forecast)
Apple traded lower a day after the tech giant unveiled a music streaming service called iTunes Radio and new mobile software at its annual developers' conference.
Meanwhile, Electronic Entertainment Expo (E3), the videogame trade show, starts in Los Angeles on Tuesday. On Monday night, both Sony and Microsoft released the PlayStation 4 and Xbox One game consoles respectively. Sony shares rose 2 percent in trading in Tokyo after the company's PS4 console was priced at $399, undercutting the Xbox One by $100.
(Read More: Pow! Pow! Pow! EA Launches 11 New Games)
Also, Japan's SoftBank said on Tuesday that it was raising its offer for U.S. mobile operator Sprint Nextel to $21.6 billion. Paulson & Co, Sprint's second biggest investor, said it would vote in favor of SoftBank's improved offer.
(Read More: SoftBank Raises Sprint Offer, Shareholder Vote Delayed)
Early on Tuesday, former World Bank President Robert Zoellik told CNBC that the rolling back of the Fed's asset purchasing program could prove a major issue for countries across the globe.
"[Fed] tapering is a big issue I think for all economies—the U.S., Europe, China, Southeast Asia—the fundamentals still go back to structural reforms," Zoellick said.
(Read More: Rising Rates Have the Attention of Stock Market)
On the economic front, wholesale inventories data for April is scheduled to be released at 10 am ET. Economists surveyed by Reuters expect a gain of 0.2 percent.
The Treasury is scheduled to auction $32 billion in 3-year notes with the results available shortly after 1pm ET.