U.S. stocks on Tuesday fought to rebound from Monday's rout, but failed as the Dow Jones Industrial average trended lower for most of the session and closed in the red.

The Dow Jones Industrial average lost 50.63 points, or 0.15%, to 33,919.84. The S&P 500 shed about 0.1% to 4,354.19, following its worst day since May on Monday. However, the Nasdaq Composite rose 0.2% to 14,746.40 as investors bought some major tech shares like Apple on the dip.

Stocks roared back earlier in Tuesday's session with the Dow up more than 300 points at one point before giving up all those gains as trading continued.

Asian markets were stable overnight, helping sentiment in the U.S. initially after fears grew Monday that the liquidity crisis at Chinese developer Evergrande would lead to a global contagion. Hong Kong's Hang Seng Index rose 0.5% after dropping more than 3% on Monday.

On Monday, the S&P 500 slid 1.7% for its worst day since May 12. The Dow Jones Industrial Average plummeted 614 points, or 1.8%, for its biggest one-day drop since July 19. The Nasdaq Composite shed 2.2%.

The drop initially attracted investors at Tuesday's open, but markets couldn't hold the comeback. The S&P 500 was up 0.9% at its high of the day. Investors were also cautious ahead of the Federal Reserve's decision on interest rates and release of economic forecasts on Wednesday.

"There has already been a sharp bounce off Monday's intraday low and the catalysts for the correction have yet to be resolved, so we would expect a bit more indigestion and begin adding risk back into the market on any further weakness as the bottoming process begins," Canaccord Genuity Chief Market Strategist Tony Dwyer said in a note Tuesday.

Investors are looking for more information from Fed Chairman Jerome Powell on Wednesday about the central bank's plans to taper its bond buying, specifically when that will happen. Powell said last month that he sees the Fed slowing its $120 billion in monthly purchases at some point this year.

The Fed will release its quarterly economic forecasts, the so-called dot plot, along with the statement on interest rates at 2 p.m. ET Wednesday. Powell will have a press conference after the announcements.

"We're going to have to see proof that the Fed dot plots don't come out in a way that spooks the market," said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Struggling real estate developer China Evergrande Group teeters on the brink of default and is due to pay interest worth $83 million this Thursday, according to S&P Global Ratings. Analysts largely believe Evergrande will miss the interest payment and S&P sees a default as "likely," which many worry could spread financial contagion the way Lehman Brothers did 13 years ago.

"Chinese government officials are well aware of the headlines comparing Evergrande to Lehman," said Ed Yardeni of Yardeni Research. "They are well aware of the consequences of letting the firm fail. So they'll intervene to restructure it. When they do, stock markets around the world should enjoy relief rallies."

The S&P 500 is down 3.7% so far in September and off 4.2% from its recent record.

Also weighing on markets this month is the delta variant, which remains a global health threat as the colder months approach and vaccination hesitancy persists among some Americans. Johnson & Johnson said on Tuesday that its Covid vaccine booster shot is 94% effective. J&J shares added 0.4% on Tuesday.

There were other winners as well. Uber shares were a standout, jumping 11% after raising its outlook for the third quarter. ConocoPhillips gained nearly 4% as energy stocks initially bounced following oil's snap back from the Monday sell-off.

Meanwhile, Disney shares fell 4% as CEO Bob Chapek warned investors about potential headwinds for Disney+ subscriber growth in the third quarter, at a Goldman Sachs conference Tuesday.

— with reporting from CNBC's Hannah Miao.