The Dow Jones Industrial Average decreased 268.37 points, or 0.96 percent, to 27,783.04. The S&P 500 fell 27.11 points, or 0.86 percent, to 3,113.87. The Nasdaq Composite Index fell 97.48 points, or 1.12 percent, to 8,567.99.
Most of the 30 Dow components traded in red territory, with Boeing and American Express declining 3 percent and 2.38 percent, respectively, leading the laggards.
Nine of the 11 primary S&P 500 sectors traded on a downbeat note, with the real estate sector losing 1.75 percent, the biggest loser.
On data front, U.S. manufacturing activity continued to lag in November amid weak inventories and new orders data, according to the latest Institute for Supply Management (ISM) manufacturing report that was released on Monday.
According to the report, last month's purchasing managers' index registered 48.1 percent, a decrease of 0.2 percentage point from the October reading, and lower than Wall Street expectations.
"Global trade remains the most significant cross-industry issue. Among the six big industry sectors, Food, Beverage & Tobacco Products remains the strongest, while Fabricated Metal Products is the weakest. Overall, sentiment this month is neutral regarding near-term growth," said Timothy Fiore, chair of the ISM's Manufacturing Business Survey Committee.
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