U.S. stocks pared early gains on Tuesday, as better-than-expected data raised the possibility of the Federal Reserve hiking rate in December.

At midday, the Dow Jones Industrial Average ticked down 1.37 points, or 0.01 percent, to 21,992.34. The S&P 500 inched down 0.38 points, or 0.02 percent, to 2,465.46. The Nasdaq Composite Index lost 1.78 points, or 0.03 percent, to 6,338.45.

Advance estimates of U.S. retail and food services sales for July were 478.9 billion U.S. dollars, an increase of 0.6 percent from the previous month, more than the expected increase of 0.4 percent, the Commerce Department announced on Tuesday.

"Stronger retail sales puts the Fed back on track to hike in December," said Chris Low, chief economist at FTN Financial, "the probability is 38.1 percent after the release and will likely rise further over the course of the day."

Meanwhile, prices for U.S. imports edged up 0.1 percent in July, led by higher fuel prices which more than offset lower prices for nonfuel imports, according to the Labor Department.

The July increase in import prices followed declines in each of the two previous months. U.S. export prices advanced 0.4 percent in July, after decreasing 0.2 percent in June.

Analysts said the market rebounded from last week's pullback amid reduced fears of military conflict and the tendency of investors to buy stocks following any retreat.