In addition, Cyprus's government is preparing aggressive curbs on the flow of cash out of the country, which will cap the amount of cash people can bring out of the country, as well as the amount of credit-card purchases of goods outside Cyprus.

WSJ: U.S. Stocks Sag

"Despite the Fed holding firm on the U.S. stimulus plan and continued optimism from the Asian markets overnight, investors still need Cyprus to deliver the goods with a credible plan B before we see another hike higher for equities, " said Mike McCudden, head of derivatives at Interactive Investor.

NPR: Markets Soft Amid Ongoing Cyprus Uncertainty

The 1994 ruling of its Court of Justice that Union countries must not buy perishable goods from Turkish Cyprus has halved the area's production of potatoes and citrus fruit.

ECONOMIST: Cyprus and Turkey