US stocks closed slightly lower after a choppy session on Monday, as investors prepared for a crucial week in which Americans will elect a new president and the Federal Reserve will release a policy statement.

Presidential candidates Donald Trump and Kamala Harris both scrambled for an edge in the last full day of a race that polls show as extremely close. It could take days to determine the victor.

Some of the so-called "Trump trades" unwound after a recent poll showed Harris, the Democratic vice president, leading in Iowa, sparking a drop in the US dollar, Treasury yields and bitcoin. Trump Media & Technology Group closed up 12.4 percent, bouncing back from early losses of nearly 6 percent.

The Dow Jones Industrial Average fell 257 points, or 0.6 percent, to 41,794, the S&P 500 lost 16 points, or 0.3 percent, to 5,712 and the Nasdaq Composite lost 59 points, or 0.3 percent, to 18,179.

Investors were largely pricing in a Fed interest rate cut of 25 basis points at its policy announcement on Thursday, with CME's FedWatch Tool showing markets pricing in a 98 percent chance of a cut, with only a 2 percent chance the central bank keeps rates steady.

The biggest gainer among the 11 major S&P sectors was energy, up 1.9 percent as oil prices climbed after OPEC+ decided to delay plans for an output increase. (Reuters)