US President Donald Trump said earlier this week that he was disbanding both the Manufacturing Council and Strategy and Policy Forum, as business leaders resigned from the council over his remarks on the Charlottesville violence.
Investors have been keeping a close eye on the news, which has weighed on the market in these two sessions.
On Thursday, the Dow Jones Industrial Average suffered its biggest decline in three months, Xinhua reported.
"Maybe it's just us, but it seems an equity correction is clearly overdue if traders just yesterday (Thursday) started worrying about Congress not working with Trump," said Chris Low, chief economist at FTN Financial, on Friday.
US equities have posted solid gains since the election day last year on high hopes for Trump's policies.
But investors now wondered whether President Trump would be able to move forward his economic agenda.
Meanwhile, European stocks suffered losses following double terrorist attacks in Barcelona, in which 14 people were killed and more than 100 others injured.
Shortly after Friday's opening bell, the Dow Jones Industrial Average lost 22.88 points, or 0.11 percent, to 21,727.85. The S&P 500 shed 4.70 points, or 0.19 per cent, to 2,425.31. The Nasdaq Composite Index was down 1.58 points, or 0.03 per cent, to 6,220.34.