"Investors need to keep an eye on Cyprus, but the situation is nowhere near the magnitude of the Greece crisis in the Fall of 2011," wrote Randy Frederick, managing director of active trading and derivatives at Charles Schwab. "With the S&P 500 up sharply in 2013 there are risks; however, the risks are substantially lower this time and that means traders should consider a correction or any pullbacks to be a buying opportunity."
The euro fell below $1.29 against the U.S. dollar, briefly tumbling to its lowest level since mid-November.
"This is evidence of a bigger problem: the lack of coherent leadership in the EU," said Brian Battle, director at Performance Trust Capital Partners. "They're proscribing austerity and pain rather than competitiveness and growth."
Meanwhile, a Central Bank source told Reuters that most Cyprus banks will reopen on Tuesday, while the Bank of Cyprus and Popular Bank will reopen on Thursday. In addition, the latter two banks will have a restriction of a 100 euro-per-day withdrawal limit, according to the sources.
Cyprus and its international lenders reached a deal merely hours before a deadline to resolve the island nation's financial crisis and avert the country's exit from the euro zone. The 10 billion euro ($13 billion) deal involves the winding down of Cyprus' second largest lender, the Popular Bank of Cyprus, and imposes a levy on uninsured deposits over 100,000 euros ($130,000) in Cypriot banks.
(Read More: Cyprus Relief: Why the Rally May Be Short Lived)
"Despite a deal being struck for Cyprus, it will set an unsettling precedent for future bailouts and investors will once again be concerned over the security of their bank deposits," wrote Mike McCudden, head of derivatives at stockbroker Interactive Investor. "Furthermore, investors should question why the regulators allowed the Cypriot banking system to rise to this size, given the experiences in Iceland and Ireland."