The Dow Jones Industrial Average dipped 12 points, while the S&P 500 traded just below the flatline. The Nasdaq Composite, however, advanced 0.2 percent as Amazon shares rose.
President Donald Trump said at the United Nations General Assemble the U.S. "will no longer tolerate abuse" on trade. We will not allow our workers to be victimized, our companies to be cheated and our wealth to be plundered and transferred," Trump added.
"It was clearly an America First speech and one that will resonate in the midterms," said said Quincy Krosby, chief market strategist at Prudential Financial. "It does not mean there won't be negotiations, but he's underscoring that the U.S. is demanding a level playing field."
Trump's comments come after U.S. Trade Representative Robert Lighthizer said the U.S. was prepared to move ahead on a trade deal with Mexico that excluded Canada. Lighthizer said negotiations with Canada are at an impasse.
Shares of Ford and General Motors fell 0.6 percent and 1.5 percent, respectively, following Lighthizer's comments.
"This is going to be a long process," said Krosby of Prudential. "Until it is resolved, the market will continue to be drawn by headlines."
Equities initially rose on Tuesday as bank shares gained. Morgan Stanley and J.P. Morgan Chase both rose more than 1 percent before trading lower, while Goldman Sachs gained 0.7 percent gained as much as 0.7 percent before sliding. Bank stocks gained as the 10-year Treasury note yield climbed to 3.11 percent, near its highest level of the year.
The gains in yields come as the Federal Open Market Committee begins its two-day monetary policy meeting, with analysts expecting the central bank to raise rates by a quarter point.
The event will be watched closely to see if the central bank provides any signals as to where monetary policy will be heading over the coming months and into next year. Most respondents to the latest CNBC Fed Survey expect the central bank to raise rates two more times before year-end.
"The drive toward normalization, which includes the FOMC beginning to reduce its balance sheet by a maximum of $150B per quarter on Monday, still sources the stiffest secular headwind for the market," Jeremy Klein, chief market strategist at FBN Securities, said in a note. "If tariffs do much more harm than I surmise, than Jerome Powell and his colleagues could drag their feet when removing accommodative measures."
Energy stocks rose broadly as Brent crude hit a fresh four-year high. The Energy Select Sector SPDR fund (XLE) jumped 0.7 percent, led by TechnipFMC and Baker Hughes. Both shares rose more than 2.5 percent.
Facebook's stock dropped 0.4 percent after Instagram's co-founders left the company. Analysts at J.P. Morgan said their departure could lead to a significant pullback in the short term.
Apple shares initially fell after Qualcomm accused the tech giant of stealing secrets and giving them to Intel. The stock recovered, however, to trade 0.5 percent higher.