But all three indices did recover by the close following sharper falls earlier in the day.
However, Treasury Secretary Steven Mnuchin repeated his view that a deal with congressional Democrats would be hard to get done before the election.
"We do need bipartisan support, we can't do this alone, so I will continue to negotiate until we can get a deal done", Mr Mnuchin said on CNBC. Stocks have recently faced selling pressure amid USA fiscal stimulus whiplash and mounting coronavirus cases globally.
"Optimism took hold like a rocket last week and now it's coming back down to earth a little bit", said Mike Zigmont, head of trading and research at Harvest Volatility Management in NY.
Amazon dropped 2.3% and Microsoft lost 0.9%, both weighing more than any other stocks on the S&P 500.
The Dow Jones Industrial Average rose 76.52 points, or 0.27 percent, at the open to 28,570.72.
The tech-rich Nasdaq Composite Index fell 0.5 per cent to 11,713.87.
Bank of America fell 5.3% and Wells Fargo tumbled 6% after a disappointing quarterly results.
The S&P 500 ended lower on Thursday after a rise in weekly jobless claims compounded worries about a stalling economic recovery and fading hopes for more fiscal aid before the election.
Third-quarter earnings season is getting underway, with signs of overall improvement in expectations of how badly United States companies have been hurt by the pandemic.
"More of what moves the market will be the crystallizing of who is going to win the presidency, and how close the Senate races are", said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta.
The widening Biden-Trump presidential election spread, coupled with increased odds of a democratic sweep judging by recent polling data, seems to have eased investor concerns over a potential contested election this November.
Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored advancers.