The Dow Jones industrial average (INDU) dropped 59 points, or 0.5%, The S&P 500 (SPX) fell 6 points, or 0.4%.
"The market is rightfully concerned and is trying to understand how this debt problem will be managed," said Rob Lutts, chief investment officer at Cabot Money Management.
Worries about how far and deep Europe's debt crisis might spread had also pressured U.S. stocks on Monday.
Earlier Tuesday, stocks got a lift after minutes from the Federal Reserve's June meeting hinted that the central bank could be open to more stimulus.
Some committee members argued that the Fed may have to consider additional stimulus measures, "especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium term."
Additional stimulus from the Fed would be the third round of quantitative easing, or QE3, since it started buying securities in an effort to stimulate the economy.
"The Fed is telegraphing that there may be a QE3," said Tom Schrader, managing director at Stifel Nicolaus. "The stock market runs on liquidity, so any more of it would benefit financial assets."
But the fact that the Fed is divided on the issue adds uncertainty to the market, so trading will likely remain choppy until investors get more clarity from the Fed, Schrader added.
Investors are also waiting for more second-quarter corporate results.
"The key will be the level of confidence in Corporate America," he said. "If management seems more positive, that's an encouraging sign for capital spending and consumer spending."
So far, that's not happening.
The dollar hit a nearly four-month high against the euro at $1.39 . The greenback fell against the British pound and the Japanese yen.
Oil for August delivery added $2.28 to settle at $97.43 a barrel.
Gold futures for August delivery rose $13.10 to settle at a record high of $1,562.30 an ounce.
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