U.S. stocks fell today as the possibility of a $14 billion fine against Deutsche Bank weighed on big banks and investors wrestled with lingering uncertainty about when the U.S. Federal Reserve will hike interest rates.

The settlement proposal, made during negotiations between the U.S. Department of Justice and Deutsche Bank over claims that the German bank missold mortgage-backed securities, was larger than expected.

Deutsche Bank's U.S.-listed shares slumped 9.6%. Dow components Goldman Sachs and JPMorgan fell over 1% each. 

The S&P 500 financial index dropped 0.96%, dragging down the benchmark index the most. The KBW Bank index fell 1.01%, putting it on track for its second straight week of declines.

Traders have all but ruled out the possibility of the Federal Reserve raising interest rates at its meeting that starts next Tuesday. But residual doubts and questions about when the Fed may finally pull the trigger still hurt sentiment.

"It's the uncertainty of next week, the complacency of investors trying to re-evaluate their portfolios as we prepare for an interest-rate hike," said Jeff Carbone, co-founder of Cornerstone Financial Partners in Charlotte, North Carolina. 

The Dow Jones industrial average was down 0.52% at 18,118.22 points and the S&P 500 had lost 0.48% to 2,136.97. 

The Nasdaq Composite dropped 0.21% to 5,238.65.

The technology index dropped 0.43%, pulled down by Apple's 0.6% decline and Oracle's 4.7% drop following weak quarterly profit.

Helping limit losses was Intel's 2.58% gain after the chipmaker raised its third-quarter revenue forecast.

The CBOE Market Volatility index, Wall Street's "fear gauge", declined 4.2%.

Declining issues outnumbered advancing ones on the NYSE by a 2.18-to-1 ratio; on Nasdaq, a 1.36-to-1 ratio favoured decliners.

The S&P 500 posted five new 52-week highs and two new lows; the Nasdaq Composite recorded 66 new highs and 41 new lows.