U.S. stocks closed lower on Monday as investors positioned ahead of key inflation data due later this week.

The Dow Jones Industrial Average fell 200.52 points, or 0.45 percent, to 43,975.09. The S&P 500 slipped 16 points, or 0.25 percent, to 6,373.45, while the Nasdaq Composite declined 64.62 points, or 0.30 percent, to 21,385.40.

Eight of the eleven major S&P 500 sectors ended in negative territory. Energy led the declines with a 0.79 percent drop, followed by real estate, which lost 0.65 percent. Consumer staples and consumer discretionary were the only sectors to post gains, rising 0.17 percent and 0.14 percent, respectively.

"Wall Street is probably breathing a sigh of relief, because we did have a nice bounce back last week from the sell-off experience the week before as a result of that very disappointing employment report," said Sam Stovall, chief investment strategist of CFRA Research.

Attention now turns to inflation readings that could determine the Federal Reserve's next move on interest rates. The consumer price index for July is due Tuesday, followed by the producer price index on Thursday.

Claudio Irigoyen, a senior strategist at Bank of America, said the central bank may delay cutting rates despite the latest weaker-than-expected jobs report.

"Cutting in September may risk starting the easing cycle without evidence that inflation has peaked," Irigoyen wrote on Monday.