The Dow Jones Industrial Average fell 320.04 points, or 0.89 percent, to 35,650.95. The S&P 500 was down 43.05 points, or 0.91 percent, to 4,668.97. The Nasdaq Composite Index decreased 217.32 points, or 1.39 percent, to 15,413.28.
Seven of the 11 primary S&P 500 sectors ended in red, with energy and consumer discretionary down 2.77 percent and 2.44 percent, respectively, leading the laggards. Real estate rose 1.32 percent, the best-performing group.
U.S.-listed Chinese companies traded mostly lower with nine of the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending the day on a downbeat note.
Investors are looking to the Fed as the U.S. central bank is set to kick off its two-day policy meeting on Tuesday, followed by a key announcement and a news conference by Fed Chair Jerome Powell on Wednesday.
The Fed is expected to drop language characterizing inflation as transitory and increase the taper pace, experts noted.
For the week ending Friday, the Dow gained 4 percent, the S&P 500 climbed 3.8 percent and the Nasdaq advanced 3.6 percent.
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