The S&P 500 has fallen with declines in real estate and financial shares as investors digest comments from United States Federal Reserve officials about plans for interest rate hikes and look for next catalysts after last week's big stock market rally.
Fed Vice Chair Lael Brainard signalled the central bank would likely soon slow its interest rates hikes.
Her comments somewhat helped lift sentiment for equities that had been dampened after Federal Reserve Governor Christopher Waller on Sunday said the Fed could consider slowing the pace of increases at its next meeting but that should not be seen as a "softening" in its commitment to lower inflation.
A massive equity rally late last week was set off by a softer-than-expected inflation report that boosted investor hopes the Fed could dial back on its monetary tightening, which has punished markets this year.
"There is still a sensitivity to Fed speak ... One was a little hawkish, one was a little dovish," North Star Investment Management Corp chief investment officer Eric Kuby said.
According to preliminary data, the S&P 500 lost 35.80 points, or 0.90 per cent, to end at 3,957.13 points, while the Nasdaq Composite lost 130.96 points, or 1.16 per cent, to 11,192.37.
The Dow Jones Industrial Average fell 206.78 points, or 0.61 per cent, to 33,541.08.
The S&P 500 last week posted its biggest weekly percentage gain since late June, while the tech-heavy Nasdaq notched its best week since March.
More Fed officials are due to speak later this week along with a slew of data, including on inflation, retail sales and housing, and earnings reports from major retailers.
"There is going to be a lot to digest both in terms of Fed speak but also in terms of economic data coming out this week," said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.
In company news, shares of Biogen Inc and Eli Lilly gained after the failure of Swiss rival Roche's Alzheimer's disease drug candidate.
Amazon shares fell as The New York Times on Monday reported the company was planning to lay off about 10,000 people in corporate and technology jobs starting as soon as this week.