Renewed trade concerns also weighed on stocks after President Donald Trump announced plans to impose a 100% tariff on movies produced in foreign countries. Trump also told reporters on Sunday that he has no plans to talk to his Chinese counterpart Xi Jinping this week, offsetting recent optimism about a potential U.S.-China trade deal.

Institute for Supply Management released a report showing an unexpected increase by its reading on U.S. service sector activity in the month of April following which the selling pressure waned. It also said it's services PMI rose to 51.6 in April from 50.8 in March, with a reading above 50 indicating growth.

Energy stocks turned in one of the market's worst performances on the day amid a steep drop by the price of crude oil, with the Philadelphia Oil Service Index plunging by 2.7% and the NYSE Arca Oil Index slumping by 1.7%. The price of crude oil tumbled to its lowest closing level in over four years after members of OPEC+ agreed to increase output by another 411,000 barrels per day in June. Steel stocks were notably weak, as reflected by the 1.1% loss posted by the NYSE Arca Steel Index. Gold stocks moved sharply higher along with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 3.1%. Airline stocks also turned in a strong performance , with the NYSE Arca Airline Index climbing by 1.2%.

Asia-Pacific stocks turned in a mixed performance , as several major markets were closed for holidays. Australia's S&P/ASX 200 Index slumped by 1.0% while India's Nifty 50 Index climbed by 0.5%. The major European markets ended the day mixed, with the U.K. market closed for a holiday. While the German DAX Index jumped by 1.1%, the French CAC 40 Index fell by 0.6%.

In the bond market, treasuries extended the notable downward move seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.1 bps to 4.34%.

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