The S&P 500 index dropped 11 points, or 0.8 percent, to close at 1,305. The Dow Jones industrial average fell 95 points, 0.8 percent, to 12,385.
The Nasdaq fell 25 points, or 0.9 percent, to 2,765.
In the U.S., the debt limit debate remains at a standstill. The limit must be raised by Aug. 2 or the government risks a default.
Five stocks fell for every one that rose on the New York Stock Exchange. Volume was slightly below average at 3.7 billion shares.