The Dow Jones fell 1.1%, to 16,330, while the S&P 500 dropped 1.2% points to 1,942 and the Nasdaq fell 1.5% to 4,756.
Shares in suppliers to Volkswagen fell after VW admitted to deceiving US regulators over emissions tests.
Borg Warner tumbled 7.6%, Honeywell was down 1.7% and Delphi lost 3.7%. Shares in big US carmakers also fell sharply.
Fiat Chrysler slumped 5.7%, Ford finished 2.8% lower, GM closed down 1.9%.
Weak commodity prices depressed shares in mining and materials companies.
Copper prices hit two-week lows and oil prices fell as doubts about the Chinese economy continued to unnerve investors.
Uncertainty about when the Federal Reserve will begin to raise interest rates is also unsettling the markets.
Last week, the Fed kept rates on hold, citing worries over global growth prospects as a major factor.
However, on Monday, Atlanta Fed president Dennis Lockhart said that an increase in US rates was still possible this year.
(Close): US shares have closed lower with the auto sector particularly hard hit.