The Dow Jones Industrial Average fell 128.85 points, or 0.39 percent, to 32,732.95. The S&P 500 decreased 29.08 points, or 0.75 percent, to 3,871.98. The Nasdaq Composite Index sank 114.30 points, or 1.03 percent, to 10,988.15.
Ten of the 11 primary S&P 500 sectors ended in red, with communication services and technology down 1.67 percent and 1.34 percent, respectively, leading the laggards. Energy rose 0.6 percent, the lone gaining group.
The Fed will kick off its two-day policy meeting on Tuesday. Markets widely expect the U.S. central bank to enact another 75 basis point rate hike when the meeting concludes on Wednesday.
The Fed has been raising interest rates since March in an aggressive bid to rein in inflation, triggering fears about the potential impact on the economy.
Last week, the Dow rose 5.72 percent, the S&P 500 climbed 3.95 percent and the tech-heavy Nasdaq gained 2.24 percent, despite a series of disappointing mega-cap tech results.
"We do not think the risk-reward currently favors a sustainable rally in equities," Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note on Monday.
"Investors will need to see Fed rate cuts or a trough in economic activity on the horizon," he said. "Today, these conditions are not in place."
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