The lender was the biggest faller on Germany's main stock market before paring back the losses.
Talks between chief executive John Cryan and the US Department of Justice ended without agreement at the weekend, according to reports.
The bank has been under intense pressure over the size of the fine.
Mr Cryan was in the US for the International Monetary Fund and World Bank's autumn meetings.
Some investors had hoped that while he was there, he might negotiate down a settlement for the bank's mis-selling of mortgage-backed securities.
Others, though, said it was always unlikely the bank could strike a deal with the US authorities so quickly.
Michael Hewson, chief market analyst at CMC Markets, said: "Deutsche Bank hasn't as yet been able to come to any agreement with the US Justice Department as it looks to overcome the hurdle of the prospect of a rather large fine.
"Talks are continuing while the bank looks at potentially spinning off a stake in its asset management division in order to free up some extra capital."
Terry Torrison, managing director at McLaren Securities, said the bank was "never going to sort out the US issues that quickly".
Deutsche Bank's shares touched 33-year lows at the end of September, before recovering slightly in recent days, over fears its finances are not strong enough to handle a large US fine.
The bank declined to comment on reports Mr Cryan had failed to reach a deal. The share price recovered to close slightly up by the end of trading.
Deutsche Bank shares dropped in early trade on reports that its boss failed to reach a swift deal with the US over lowering a $14bn (£11.3bn) fine.