West Texas Intermediate (WTI) futures were down 40 cents or 1% to $39.66 a barrel, the lowest level on the New York Mercantile Exchange since early April.
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Worries about the glutted energy market pushed Dow members ExxonMobil and Chevron down by 3.4 per cent each, leaving the blue-chip index in negative territory.
Apple’s 1.2 per cent rise provided the biggest boost to the three main indexes.
AIG and Electronic Arts are expected to report results after the bell.
“After the GDP data that we saw last week, the Fed will definitely skip September”, said Peter Cardillo, chief market economist at First Standard Financial in NY.
Growth in USA gross domestic product in the second quarter came in below expectations on Friday, fuelling speculation that the Federal Reserve may not pull the trigger on raising interest rates anytime soon.
Data on Monday, however, showed US manufacturing activity slowed in July as orders fell broadly and construction spending dropped in June, following up a tepid reading on USA second-quarter gross domestic product on Friday.
USA stock index futures were little changed on Monday, the first trading day of the month, as the chances of a near-term US interest rate hike faded.
At 9:44am ET (1344 GMT), the Dow Jones industrial average was down 28.76 points, or 0.16 per cent, at 18,403.48, the S&P 500 was down 3.48 points, or 0.16 per cent, at 2,170.12 and the Nasdaq Composite was up 0.75 points, or 0.01 per cent, at 5,162.88.
The automakers’ declines pulled the S&P consumer discretionary sector down 1.5 per cent as the worst-performing of the 10 major S&P groups.
SolarCity (SCTY.O) fell 5.8 percent to $25.16, reversing from premarket gains, after Tesla (TSLA.O) said the two companies have agreed to merge. Tesla was little changed at $235.12.
Other biotech shares were also strong, with Gilead Sciences advancing 1.3 percent and Celgene 2.2 percent.
The S&P 500 index showed 13 new 52-week highs and one new low, while the Nasdaq recorded 44 new highs and 32 new lows.
Meanwhile, the Nasdaq Composite Index (NYSEARCA:QQQ) extended its recent highs on gains in healthcare and information technology. The pound has fallen more than 11 percent against the dollar since Britain voted on June 23 to leave the European Union and posted its third consecutive monthly drop against the greenback last month.
The yen retreated 0.3 percent to 102.37 per dollar after soaring 4 percent last week.
However, personal income rose only 0.2%, missing estimates of 0.3%, while inflation remained below the Federal Reserve’s 2% target.
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The 10-year Treasury note yield climbed four basis points to 1.50 percent, Bloomberg Bond Trader data show.
