Traditional safe-havens caught a bid Tuesday. Gold futures for June delivery rose $20.30 to settle at $1,2724.20 per ounce, while the benchmark 10-year note yield slipped to 2.30 percent.

Equities cut losses after President Donald Trump told a group of executives that his administration was looking to revamp Dodd-Frank, which might be eliminated and replaced with "something else."

"There are a number of things that have traders concerned. First, the geopolitical circumstances. Second, if Congress doesn't move quickly, the government will shut down," said JJ Kinahan, chief market strategist at TD Ameritrade.

The Dow transports were also under pressure, as shares of United Continental briefly pulled back more than 4 percent outrage over a passenger being dragged off an overbooked flight finally caught up to the stock.

The S&P 500 pulled back about 0.1 percent, with financials and information technology leading decliners. The Nasdaq composite declined 0.2 percent as tech stocks declined for an eighth straight session.

"Equities have been ignoring geopolitical concerns over the past week, but now things are heating up and investors are preparing for some volatility," said Ryan Detrick, senior market strategist at LPL Financial.

The Dow Jones industrial average slipped less than 10 points after dropping more than 100 points, with Apple contributing the most losses. Apple was hit by a countersuit from chipmaker Qualcomm in a dispute over mobile technology licensing fees.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded more than 7 percent higher at 15.14. The index had traded more than 10 percent higher earlier in the session. LPL's Detrick said the Vix snapped a 103-session streak in which it closed below its 200-day moving average on Monday.

Secretary of State Rex Tillerson said Tuesday the U.S. will stand up against anyone who commits crimes against humanity.

"We rededicate ourselves to holding to account any and all who commit crimes against the innocents anywhere in the world," Tillerson told reporters before heading to Moscow, where he and Russian officials are expected to discuss last week's suspected chemical attack in Syria.

The U.S. responded by launching 59 Tomahawk missiles at a Syrian airfield.

But the Trump administration is also navigating through rising tensions with North Korea. On Saturday, a U.S. official told Reuters that a U.S. Navy strike group will be moving close to the Korean peninsula as a show of force.

Trump tweeted Tuesday: "North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them! U.S.A."

Trump tweet

"I think this is all a reminder of how quickly geopolitical matters can take center stage," said Mike Baele , managing director at U.S. Bank Private Client Reserve. "Investors are sitting on their hands and geopolitical concerns have caused a flight to safety."

On the economic data front, the NFIB small business optimism index slipped to 104.7 in March from 105.3 in February, but the uncertainty index hit its second-highest level in history.

"This just underscores that clarity on fiscal spending and taxes will be the catalyst that gets markets going. The clock is running but apparently no one is paying attention," Michael Block, chief strategist at Rhino Trading Partners, said in a note.

White House Press Secretary Sean Spicer said Monday said he would like to see tax reform passed by August but did not firmly commit to it. Treasury Secretary Steve Mnuchin had set August as a goal for pushing through tax reform earlier this year.

Economic data has been mixed recently, with most sentiment and confidence indicators holding around multi-year highs while the so-called hard data — like inflation and employment — have not fared as well.

Stocks have managed to hold around all-time highs, but bond prices have climbed. "it's simple: The stock market has been trading off the soft economic data and the bond market has been moving on the hard data," said Nick Raich, CEO of The Earnings Scout.