A trader works on the floor of the New York Stock Exchange (NYSE) Reuters

US equity markets dipped on Tuesday (29 March) as investors remained cautious ahead of a highly awaited speech from Federal Reserve chairwoman Janet Yellen.

Shortly after the opening bell, the Dow Jones Industrial Average was down 0.33% to 17,478.00, while the S&P 500 and the Nasdaq were 0.24% and 0.27% lower respectively after Wall Street edged slightly higher in the previous session.

Investors await Yellen's speech

Yellen will address the Economic Club of New York at 12.20 pm EST (5.20pm BST) about the economic outlook and monetary policy and is expected to argue in favour of two interest rate hikes this year.

"We continue to see oscillation in FOMC speculation and given that overnight US macro data revealed that consumer spending practically stagnated while inflation stepped back, any notion that the Fed will tighten further in the near term is for now muted," said London Capital Group's analyst Brenda Kelly. "This leaves the US economy growing at a pace of less than 1%."

Elsewhere, with the exception of Hong Kong's Hang Seng, most Asian markets closed in the red. Japan's Nikkei lost 0.18%, while the Shanghai Composite Index tumbled 1.28% as investors erred on the side of caution ahead of Yellen's speech.

Their European counterparts fared little better and were all nursing losses by mid-afternoon. London's FTSE 100 and Germany's Dax were down 0.30% and 0.34% respectively, while France's CAC 40 bucked the trend and gained 0.39%

Yahoo gains on bid speculation

On the company front, Foot Locker shares gained ground after S&P Dow Jones Indices late Monday announced the sports apparel retailer would be added to the S&P 500.

JetBlue Airways, Alaska Air Group and Virgin America were all up between 0.13% and 1.12% after the former said it expected to receive takeover offers from the first two by the end of this week.

Meanwhile, Yahoo! was also on the front foot after it reportedly gave potential bidders two weeks to submit preliminary offers for its core Web business and Asia-based assets.