US stocks ended lower on Tuesday, with the Nasdaq losing more than 1 percent as investors grew more cautious after Iran fired missiles at Israel.

Iran launched the salvo of ballistic missiles in retaliation for Israel's campaign against Tehran's Hezbollah allies. In response, US President Joe Biden directed the US military to aid Israel's defence and shoot down missiles aimed at Israel, the White House National Security Council said.

While the broader market fell, shares of energy companies rose along with US oil prices, which settled up 2.4 percent. Shares of Exxon Mobil gained 2.3 percent.

Defence stocks also rose, including Northrop Grumman , which rallied 3 percent, and Lockheed Martin, up 3.6 percent. Airline shares fell, including Delta Air Lines, which was down 1.6 percent.

Investors avoided risk following the Middle East news, but indexes ended off their lows of the day.

"If we do see further escalation I could see continued market weakness because we just don't know how far this is going to go," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

"The level of risk has increased. The markets have had a good year and people can get scared out of the market depending on what happens over the next couple of weeks."

The Dow Jones Industrial Average fell 0.41 percent, to 42,157, the S&P 500 lost 0.93 percent, at 5,709 and the Nasdaq Composite dropped 1.53 percent, to 17,910.

On Monday, the three major US indexes scored strong gains for September and for the quarter. CBOE's market volatility index, Wall Street's fear gauge, rose.

Data released early on Tuesday showed U.S. job openings rebounded in August, while the Institute for Management Supply's (ISM) report showed manufacturing activity stood at 47.2 in September, versus estimates of 47.5.

Investors were also cautious ahead of US jobless claims data on Thursday and monthly payrolls on Friday.

Investors also monitored a port strike on the East Coast and the Gulf Coast, halting the flow of about half the nation's ocean shipping. (Reuters)