How did World War I affect American writers?

World War I demolished the senses among many Westerners that civilization would protect them from barbarism and that certain moral truths were self-evident. The war helped to undermine ideas related to determinism—the notion that all actions, even moral choices, rested upon previously established actions or ideas—and rationalism. Institutions that people had relied on for guidance, such as the church, were seen as less credible.
Emotional results of the war included alienation, moral ambivalence, and, for returning soldiers, "shell-shock," which we now call post-traumatic stress disorder (PTSD). This is not to say that people had not ever had these experiences in the wake of other wars, but no other war had been on the scale of World War I, and, thus, no other war had the same massive impact. This confrontation with brutality fostered more honesty in prose and poetry. Even those who did not experience the war directly, such as T.S. Eliot, could not help but to explore the existential crises it had created. Prose included language writers dared not print in the nineteenth century, such as profanity and sexually explicit language.
Three of the most important American writers, including Ernest Hemingway, F. Scott Fitzgerald, and John Dos Passos, were veterans of the war. Dos Passos's work focused particularly on the brutality of humanity, which was likely a result of his experience of war. Hemingway's most important works, including, For Whom the Bell Tolls, A Farewell to Arms, and The Sun Also Rises deal with some aspect of the war experience. In The Sun Also Rises, the influence is more subtle: protagonist Jake Barnes suffers from a war injury that has left him impotent. In this regard, war did not define a character's manhood but, conversely, weakened his manhood.
For Fitzgerald, the First World War is mentioned in his works as a relatively small event compared to the experiences that his protagonists have at home. For Dexter Green, in the short story "Winter Dreams," the war interrupted his business plans. For Jay Gatsby, the war provided a poor Midwestern farm boy with an opportunity to study at Oxford. Thus, the war is peripheral to the characters' ambitions or, in Gatsby's case, helps to facilitate an ambition. In Fitzgerald's own life, the war disrupted his plan to marry Zelda Sayre, whom he met while stationed on an army base outside of Montgomery.