The Dow Jones Industrial Average fell 183.12 points, or 0.64 percent, to 28,462.14. The S&P 500 was down 18.73 points, or 0.58 percent, to 3,221.29. The Nasdaq Composite Index fell 60.62 points, or 0.67 percent, to 8,945.99.
Most of the Dow component companies traded in red territory, with IBM dropping 1.82 percent, leading the laggards.
All of the 11 primary S&P 500 sectors declined, with communication services down 1.02 percent, lagging behind the rest groups.
U.S. equities have enjoyed a strong rally in December, with the main indexes hitting record highs last week amid year-end optimism.
Market sentiment has been lifted by easing tensions over U.S.-China trade relations after the two countries agreed on the text of a phase-one trade deal earlier this month.
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