Exxon Mobil was down 2% and Chevron fell 2.27% as US crude dropped by more than $1 a barrel to $46.54.
Oil traders decided a sharp drop in US crude stockpiles in the past week - which had eased concerns of oversupply and sent the oil price up on Thursday - would be short-lived.
"One week's worth of data does not make a trend," said IG analyst Bernard Aw.
Bank stocks posted modest gains, although Wells Fargo was down 2% after it was fined $185m for illegally opening accounts to boost sales targets.
In late trading in New York, the Dow was down 1.6%, S&P 1.8%, and Nasdaq 2%.
US stocks edged lower on Wall Street as a 2% drop in oil prices weighed on energy firms.