The Standard & Poor's 500 index fell 7 points, or 0.3 percent, to 2,420.
Singapore was the biggest decliner in Southeast Asia, shedding as much as 0.6 percent, dragged by losses in telecom, industrial and real estate stocks. The Nasdaq composite rose 11 points, or 0.2 percent, to 6,188.
Germany's 10-year yield edged up 2 basis points to 0.56 percent DE10YT=TWEB having more than doubled over the last few weeks.
THE QUOTE: "We're in a sort of wait-and-see pattern right now ahead of Yellen's testimony in front of Congress", said Nadia Lovell, U.S. equity strategist at J.P. Morgan Private Bank.
Perceptions that an era of ultra-cheap money is gradually ending have been reinforced by European Central Bank minutes showing policymakers are open to reducing monetary stimulus.
Yellen's semi-annual testimony to Congress on Wednesday and Thursday, may give further indication on the timing of the third Fed rate hike for the year, said Grace Aller, an analyst with Manila-based AP Securities.
Looking forward, The Fed has no reason to believe the economy won't continue to expand, which is consistent with its position last month when it chose to raise interest rates. The latest USA economic reports, particularly for jobs, have been upbeat.
Investors are also eyeing the start of the United States corporate earnings season. Delta Air Lines, JPMorgan Chase and Wells Fargo are among the big companies due to report their latest quarterly results this week.
In a section on financial stability, the Fed again acknowledged that valuation pressures are on the rise, but seemed content as asset-market gains haven't led to increased borrowing outside of the financial sector. The South African rand ZAR= , Turkish lira TRY= and Russian Federation rouble RUB= all dropped around 1 percent as some unusually concentrated selling resumed to emerging markets too. PepsiCo's sales volumes in North America were soft, however.
Business software developer Citrix Systems (CTXS) may also see early weakness after announcing CEO Kirill Tatarinov is leaving the company.
The 10-year U.S. Treasury yield was steady near a two-month high of 2.398 percent hit on Friday. Visit MarketWatch.com for more information on this news. Britain's FTSE 100 slid 0.5 percent.
Spot gold was up 0.23 per cent at US$1,216.79 per ounce and away from Monday's US$1,204.45, its lowest since March 15.
At 5 p.m., the dollar stood at ¥114.31-31, up from ¥114.17-18 at the same time Monday.