The Dow slid 349.27 points or 0.8 percent to 45,282.47, the S&P 500 fell 27.59 points or 0.4 percent to 6,439.32 and the Nasdaq slipped 47.24 points or 0.2 percent to 21,449.29.

Wall Street weakened as traders engaged in profit-taking after last Friday's strong rally that pushed the Dow to a record closing high. The surge was driven by Fed Chair Jerome Powell's remarks signaling a likely interest rate cut next month.

Despite the pullback, selling pressure remained muted as investors awaited key events later this week. Market focus is on Nvidia (NVDA), with the AI leader set to release its Q2 earnings after Wednesday's close.

Commerce Department released a report showing new home sales in the U.S. decreased from an upwardly revised level in the month of July. It is due to release a report on Friday that includes the Fed's preferred readings on consumer price inflation which will likely attract attention. Reaction to reports on durable goods orders, consumer confidence and second quarter GDP may also impact trading in the coming days. It also said new home sales fell by 0.6 percent to an annual rate of 652,000 in July after surging by 4.1 percent to an upwardly revised rate of 656,000 in June.

Biotechnology stocks significant moved downwards , with the NYSE Arca Biotechnology Index slumping by 2.2 percent after ending last Friday's trading at a nearly six-month closing high. Transportation stocks were considerably weak, as reflected by the 1.8 percent loss posted by the Dow Jones Transportation average. Pharmaceutical, healthcare and utilities stocks also came under pressure as the day progressed while oil producer stocks saw some strength amid a sharp increase by the price of crude oil.

Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index climbed by 0.4 percent, while China's Shanghai Composite Index surged by 1.5 percent. Most European stocks moved to the downside on the day, with the U.K. markets closed for a public holiday. While the French CAC 40 Index tumbled by 1.5 percent, the German DAX Index fell by 0.4 percent.

In the bond market, treasuries gave back ground after moving sharply higher during last Friday's session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up 1.5 bps to 4.27 percent.

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