The New York Stock Exchange closed the first trading day of the week lower

The Dow Jones Industrial Average fell 0.77%, or 349.27 points, to close at 45,282.47.

The Nasdaq dropped 0.22%, or 47.24 points, to close at 21,449.29, while the S&P 500 slid 0.43%, or 27.59 points, to 6,439.32.

Markets followed a negative trend Monday after closing the previous week on a positive note on the heels of Fed Chair Jerome Powell cautiously suggesting the possibility of a September interest rate cut.

"With policy in restrictive territory, the baseline outlook and shifting balance of risks may warrant adjusting our policy stance," Powell said in Friday's Jackson Hole speech.

Following Powell's statement, pricing in money markets indicated strengthened expectations of a 25-basis-point cut at the Fed's Sept. 16-17 meeting.

Intel shares were 1% lower after the company warned that the Trump administration's acquisition of a 10% stake in the firm could negatively impact the company's operations outside the country and could spark "adverse reactions."

The chipmaker said having the US government as a significant stockholder could subject Intel to additional regulations, obligations or restrictions abroad, as the firm's sales outside the US accounted for 76% of its revenues last year.

US President Donald Trump vowed to keep making similar deals "all day long," adding, "I will also help those companies that make such lucrative deals with the United States."

Earlier in the day, White House economic advisor Kevin Hassett told broadcaster CNBC that the Intel move was part of a broader strategy to create a sovereign wealth fund that could include more companies.

“Well, I think this is a very, very special circumstance because of the massive amount of CHIPS Act spending that was coming in,” Hassett said.

On the data side, new home sales in the US were down 0.6% month-on-month in July, still beating market forecasts.

This week, Nvidia's financial results, which will be released Wednesday, as well as personal consumer spending data due Friday, will be closely watched.