Downbeat comments from a White House official on the prospects of a new fiscal stimulus package for the US economy sent stocks trading much lower at the open on Monday.
About 30 minutes into trading, the Dow Jones Industrial Average was down 1.4% at 27 941.28.
The broad-based S&P 500 fell 0.9% to 3 433.34, while the tech-rich Nasdaq dropped 0.2% to 11 524.63.
Democrats and Republicans in Washington have tried for months to agree before the November 3 election on another massive stimulus package to help the economy recover from the Covid-19 downturn.
But there has been no agreement yet, and White House economic advisor Larry Kudlow said before markets opened that differences remain between the two sides.
"The talks have certainly slowed down, but they're not ending," Kudlow said on CNBC, while declining to make a prediction about the prospects for an agreement.
That flew in the face of expectations on Wall Street that lawmakers would eventually overcome their differences, and the nationwide surged in new coronavirus infections also dampened sentiment.
Investors are also expecting a flurry of earnings reports from major companies this week, including Ford, Pfizer, Caterpillar and 3M.
Shares of donut giant Dunkin shots up 16% after confirming it was in talks on a deal to be acquired by Inspire Brands and go private.