The S&P 500 index, which ended Friday at a new high, fell 8.8 points or 0.41% to 2,108.92.
The tech-heavy Nasdaq, which also set a new record last week, lost ground as well. It decreased 31.84 points or 0.63% to hit 5,060.25.
Meanwhile, the Dow Jones dropped 42.17 points or 0.23%, closing at 18,080.14.
Shares in drugs firms slid after Mylan rejected Teva Pharmaceutical's $40.1bn hostile takeover bid, saying the Israeli firm undervalued the company.
Mylan sank 5.1% and Teva dropped 4.3%.
Meanwhile, one of the top gainers was technology giant Apple, whose shares rose 1.8% ahead of its second quarter results announcement.
Shares in Tesla Motors also rose 6%, boosted by reports that the electric-car maker's planned announcement on Thursday could be more significant than anticipated.
(Close): US stocks closed lower on Monday, bringing a three-day winning streak to an end.