At 12:32 p.m. ET the Dow Jones industrial average  was down 96.39 points, or 0.59%, at 16,369.91, the S&P 500 was down 10.87 points, or 0.56%, at 1,929.37 and the Nasdaq Composite index was down 21.52 points, or 0.47%, at 4,592.43.

Eight of the 10 major S&P sectors were lower, with the energy index's 3% fall leading the decliners. Oil majors Exxon and Chevron were down about 2.5%.

Slammed by collapsing oil prices, stocks have had a volatile start to the year with traders expecting the Fed to scale back the number of rate hikes this year.

Coming off the worst January since 2009, the S&P 500 is already down more than 5% for the year. Traders are pricing in only a 17% chance that the Fed will raise rates in March, according to CME Group's FedWatch.

Investors will pay close attention to Fed vice-chairman Stanley Fischer's speech on monetary policy at 1 p.m. ET.

Fourth-quarter corporate reporting season is well under way, with S&P 500 companies on average expected to post a 4.1% drop in earnings, according to Thomson Reuters I/B/E/S.

Internet giant Alphabet, which reports after the close, was up 0.5% at $765.48. Toy maker Mattel will also report after the close.