Stocks in Taiwan were flat but markets in Southeast Asia were mostly higher.
China's Shanghai Composite index rose 11.39 points or 0.4% to 3,290.64 as China's legislature nominated Yi Gang, vice-governor of the People's Bank of China, as its new chief.
OIL: Benchmark U.S. crude rose 16 cents to $63.70 per in electronic trading on the New York Mercantile Exchange.
The scandal at the social media giant further fuelled anxiety among investors already fretting over possible USA interest rate rises and Donald Trump's protectionist rhetoric, which has sparked talk of a global trade war.
Australia, a big producer of basic commodities, is among the most vulnerable economies should US protectionism lead to a tit-for-tat reprisal from China, a key consumer of several commodities. The Dow Jones industrial average fell 1.3 percent to 24,610.91. Its shares have fallen 9 percent this week, its worst performance in two years. The Nasdaq composite rose 20.06 points, or 0.3 percent, to 7,364.30.
The yield on 10-year Treasuries jumped three basis points to 2.88 per cent; yields on 10-year German bonds climbed 2 basis points to 0.58 per cent while United Kingdom 10-year government bond yields climbed 3 basis points to 1.48 per cent.
FACEBOOK EFFECT: Facebook stocks dropped another 2.6 percent on Tuesday following reports that the Federal Trade Commission will open investigations on its handling of user data following the revelations that Cambridge Analytica harvested private data of its 50 million users. U.S. crude fell 0.51 percent to $62.02 per barrel and Brent was last at $66.05, down 0.24 percent on the day.
Software stocks could come under pressure Tuesday after Oracle reported quarterly revenue that missed Wall Street estimates on disappointing sales from its cloud business.
Shares were stuck on their worst run since November on Monday, as caution gripped traders in a week in which the Federal Reserve is likely to raise US interest rates and perhaps signal as many as three more hikes lie in store this year. "The markets are completely split on whether the Fed will project three rate hikes this year or four", said Hiroaki Mino, senior strategist at Mizuho Securities.
Followed by the FOMC announcement at 1800 GMT, Jerome Powell will hold his first news conference as Fed chief at 1830 GMT.
"There has been the narrative of supposed policy convergence between the ECB and the Fed, but that is just not the reality", said Saxo Bank's head of FX strategy John Hardy. The S&P 500 index rose 0.1 percent to 2,716.94.
"By itself, a rate hike is not sufficient to lift the dollar considerably from current levels and we would have to see a shift in the Fed's 'dot plot" projections or hawkish talk despite the recent rise in bond yields'.
The Canadian dollar gained 0.35 percent to C$1.3025 to the USA dollar, while the Mexican peso gained 0.7 percent to 18.630 per US dollar, following the report of softening in Washington's stance towards the NAFTA. On Tuesday, it finished at $63.54 per barrel, up $1.42 from the previous session.
The euro moderated gains, rising to $1.2341 after bouncing on Monday following a Reuters report that European Central Bank officials were shifting their debate from bond purchases to the expected path of interest rates.
Gold increased 0.4 percent to $1,316.95 an ounce, the highest in a week on the biggest climb in more than two weeks.
On technical charts, the dollar seems to have found strong support in the 105.00 to 105.50 yen area, said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo. South Korea's Naver Corp., parent of Line messenger app, added 0.1 percent.
A 0.6-1.3 percent drop for Europe's main bourses amid a flurry of gloomy company news and weaker Wall Street futures meant MSCI's main 47-country world stocks index was down for a fifth day.