U.S. stocks were little changed on Tuesday as an interest rate hike in China and weaker Apple shares were offset by positive sentiment from the latest deal news.

Investors looked ahead to a Federal Reserve statement on the outlook for the economy and interest rates later on Tuesday.

Stocks showed a muted reaction to an industry report that the vast U.S. services sector grew more slowly in March.

China's central bank increased interest rates for the fourth time since October, raising suspicions that data next week may show inflation rose more than expected in March.

Apple Inc had its weighting cut in a rebalancing of shares in the Nasdaq 100, forcing some to sell the iPhone maker's stock. Once the rebalancing takes effect on May 2, the projected weight of Apple will be 12.33 percent of the index compared with the current 20.49 percent, Nasdaq OMX said. Apple shares fell 0.9 percent to $338.04.

Shares of Microsoft Corp , whose weighting will rise, gained 1.6 percent to $25.95.

Texas Instruments is to pay a 78 percent premium for rival National Semiconductor in a deal worth $6.5 billion. National Semi shares jumped 71.1 percent to $24.08.

The market is getting used to the rate hikes in China and there is less concern it will derail global growth, said Jeff Kleintop, chief market strategist at LPL Financial in Boston.

On the plus side there's this M&A deal in the tech space, he said. Companies are beginning to spend their cash on merger deals and also on hiring. They're feeling confident enough to spend on growth initiatives.

The Dow Jones industrial average <.DJI> dropped 25.84 points, or 0.21 percent, to 12,374.19. The Standard & Poor's 500 Index <.SPX> dropped 0.34 points, or 0.03 percent, to 1,332.53. The Nasdaq Composite Index <.IXIC> gained 2.52 points, or 0.09 percent, to 2,791.71.

Investors will scour the minutes from the latest meeting of the Fed's policy-setting committee, expected at 2 p.m. Fed Chairman Ben Bernanke said a recent rise in U.S. inflation was driven primarily by global commodity prices and was unlikely to persist.

(Reporting by Rodrigo Campos; Editing by Kenneth Barry)