Trump on Friday signed executive orders to bar admission of Syrian refugees and suspend travel to the United States from Syria, Iraq, Iran and four other countries on the grounds of national security.
Thousands of people rallied in major U.S. cities and at airports in protest, while several countries including long-standing American allies criticized the measures as discriminatory and divisive.
The promise of tax cuts and simpler regulations had lured investors into equity markets since Trump's election in November, but some are worried about the potential risk of his protectionist policies.
"A new week of trading is getting off on a sour note, as key macro news, Fed action, international and domestic backlash over Trump's immigration stand are putting investors on the defense," Peter Cardillo, chief market economist at First Standard Financial, wrote in a note.
"We look for a bumpy to negative ride as the 'Worry Trade' rules the day."
The CBOE Volatility index or Wall Street's "fear gauge" rose 9.2 percent, after remaining negative for four straight days.
At 9:41 a.m. ET (1441 GMT) the Dow Jones industrial average was down 98.15 points, or 0.49 percent, at 19,995.63, slipping below the 20,000 mark it hit for the first time ever on Wednesday.
The S&P 500 was down 13.7 points, or 0.60 percent, at 2,280.99 and the Nasdaq Composite was down 47.61 points, or 0.84 percent, at 5,613.18.
10 of the 11 major S&P indexes were lower, with technology and financials weighing the most.
Utilities - considered a defensive play - was slightly higher.
Facebook and Apple, which are scheduled to report earnings this week, were the top drags on the S&P 500. Other technology stocks that were trading lower included Alphabet and Microsoft.
Tempur Sealy plunged 27.6 percent to $45.74 after the company said it terminated its contracts with mattress retailer Mattress Firm following disagreements over changes in their contracts.
Airline stocks including American Airlines , United Continental and JetBlue slipped.
A report from the U.S. Commerce Department showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.5 percent after a 0.2 percent gain in November. - Reuters