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U.S. stocks fell on Friday as the possibility of a $14 billion fine against Deutsche Bank weighed on big banks and investors wrestled with lingering uncertainty about when the U.S. Federal Reserve will hike interest rates.

The settlement proposal, made during negotiations between the U.S. Department of Justice and Deutsche Bank over claims that the German bank missold mortgage-backed securities, was larger than expected.

Deutsche Bank's U.S.-listed shares (DB.N) slumped 9.35 percent. Dow components Goldman Sachs (GS.N) and JPMorgan (JPM.N) fell over 1 percent each.

The S&P 500 financial index .SPSY dropped 0.91 percent, dragging down the benchmark index the most. The KBW Bank index .BKX fell 1.11 percent and logged its second straight week of declines.

Traders have all but ruled out the possibility of the Federal Reserve raising interest rates at its meeting that starts next Tuesday. But residual doubts and questions about when the Fed may finally pull the trigger still hurt sentiment.

"It's the uncertainty of next week, the complacency of investors trying to re-evaluate their portfolios as we prepare for an interest-rate hike," said Jeff Carbone, co-founder of Cornerstone Financial Partners in Charlotte, North Carolina.

The Dow Jones industrial average .DJI lost 0.49 percent to finish at 18,123.80 points and the S&P 500 .SPX fell 0.38 percent to 2,139.16.

Caution gripped Asian shares on Monday ahead of central bank meetings in the United States and Japan this week, while oil prices bounced on talk of an OPEC deal on output and reports of fighting around Libyan oil ports.

Bombings in New York City and New Jersey and a stabbing at a Minnesota shopping mall added to a general air of risk aversion.

While U.S. officials are investigating the attacks as potential "acts of terrorism," they stopped short of characterizing the motivation behind any of them until more evidence is uncovered.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was flat, while South Korea .KS11 edged up0.1 percent. Liquidity was further sapped by a holiday in Japan.