U.S. stocks open sharply lower following European markets

U.S. stocks opened sharply lower Tuesday as the plunge in European equity markets weighed on Wall Street sentiment.

European markets traded drastically lower Tuesday, with Germany's benchmark DAX index at the Frankfurt Stock Exchange diving over 3 percent, as a result of Volkswagen's emissions scandal.

The German carmaker on Tuesday revealed that a total of 11 million diesel cars may have been involved in the emission-testing manipulations.

The company also said in a statement that it had set aside 6.5 billion euros (7.3 billion U.S. dollars) to cover the costs of the issue.

The company's shares continued to plummet Tuesday, losing 20 percent during the trading, on news that it could face a fine of 18 billion dollars in the United States for rigging emission tests on its diesel vehicles.

Meanwhile, uncertainty about the timing of interest rate hikes by the U.S. Federal Reserve also dampened investor sentiment.

The U.S. central bank held its benchmark rate near zero after concluding its two-day monetary policy meeting Thursday. Most Fed officials, however, still expect a rate increase this year, the first in nine years.

Shortly after the opening bell, the Dow Jones Industrial Average dipped 183.34 points, or 1.11 percent, to 16,326.85. The S&P 500 lost 20.82 points, or 1.06 percent, to 1,946.15. The Nasdaq Composite Index tumbled 63.55 points, or 1.32 percent, to 4,765.41.

On Monday, U.S. stocks pared part of early gains to end higher as investors meditated on the U.S. existing-home sales. Endi