Equities on both side of the Atlantic moved lower with the price of oil as Iraq added to the global supply glut, bolstering the appeal of safe-haven investments such as US Treasuries and gold.

Oil dropped as Iraq's oil ministry told Reuters the country had record output in December, with its fields in the central and southern regions producing as much as 4.13 million barrels a day, while a senior Iraqi oil official said separately the country may lift output this year.

Also, Saudi Aramco, the world's top oil exporter, said it is not easing investments in its oil and gas production capacity.

"Our investments in capacity of oil and gas have not slowed down-we have been able to do a lot of cuts in spending by simply driving down costs," Aramco chairman Khalid al-Falih told a business conference in Riyadh.

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Brent crude traded at US$30.73 a barrel around midday in New York, while US crude traded at US$30.55 a barrel, each more than 4 per cent lower on the day.

US Federal Reserve policy makers are about to start a regularly scheduled two-day meeting, and investors are looking to see if the global financial market turmoil since last month's gathering has altered the outlook for interest rate increases this year.

"We could get a dovish message" on Wednesday, Michael Hanson, US senior economist with Bank of America Merrill Lynch, told Bloomberg. The bank expects the Fed will raise rates three times this year, fewer than the median four increases forecast by policy makers in December.

US Treasuries rose, pushing yields on 10-year notes three basis points lower to 2.02 per cent.

Gold also strengthened, with bullion for immediate delivery adding 0.6 per cent to US$1,104.40 an ounce.

Wall Street moved lower. In 12.42pm trading in New York, the Dow Jones Industrial Average fell 0.31 per cent, while the Nasdaq Composite Index declined 0.33 per cent. In 12.27pm trading, the Standard & Poor's 500 Index retreated 0.6 per cent.

The Dow fell as slides in shares of Caterpillar and those of Goldman Sachs, last down 4.1 per cent and 2.6 per cent respectively, outweighed gains in shares of Wal-Mart Stores and those of Verizon Communications, last up 1.4 per cent and 1.1 per cent respectively.

Shares of Caterpillar fell after Goldman Sachs downgraded its rating on the stock to "sell".

Bucking the trend, shares of McDonald's rose, last up 1 per cent, after the fast-food chain posted same-store sales that exceeded expectations.

"We are demonstrating that our turnaround plan is key to restarting growth and becoming a modern and progressive burger company," McDonald's chief executive officer Steve Easterbrook said in a statement. "As we enter 2016, we expect continued positive top-line momentum across all segments."

In Europe, the Stoxx 600 Index finished the session with a 0.6 per cent decline from the previous close. Germany's DAX Index gave up 0.3 per cent, the UK's FTSE 100 Index dropped 0.4 per cent, while France's CAC 40 Index slid 0.6 per cent.