By Caitlin Ostroff 

Technology stocks tumbled Monday after ending last week with the S&P 500 and Dow Jones Industrial Average at fresh records.

The S&P 500 ticked down 0.1%. The index on Friday closed at its 26th all-time high for this year. The Dow rose 0.6%, while the Nasdaq Composite edged down 1.4%.

Stocks have ground higher in recent days after Federal Reserve officials reiterated their commitment to easy financing conditions to aid the economic recovery. President Biden is also proposing additional fiscal spending. A weaker-than-expected jobs report on Friday boosted optimism that the government and central bank are likely to continue with supportive policies. But some money managers are concerned that stocks' high valuations may mean the rally will lose steam.

"Markets have come quite a long way and gone up a lot in a relativity straight line," said Mike Bell, global market strategist at J.P. Morgan Asset Management. "So the hurdle for further gains becomes higher."

Investors may be hesitant to put more money into expensive stocks such as technology shares, said Sebastien Galy, senior macro strategist at Nordea Asset Management. Money managers are increasingly betting on sectors such as banking, travel and leisure that would benefit when the economy rebounds and more businesses reopen.

Concerns that higher inflation may erode the value of future earnings is also likely to be driving investors away from technology stocks, investors said.

Shares of semiconductor companies like Skyworks Solutions and Qorvo were among Monday's decliners, falling 4.2% and 2.9%, respectively.

Climbing commodity prices, supply chain issues and chip shortages are adding to producing costs, which are likely to feed through to individual consumers and corporate profits, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"From a market perspective, because everyone knows that inflation is going higher, the real question is whether the rise in inflation is going to be durable or not," Ms. Ozkardeskaya said. "Inflation is a headwind for growth stocks. Value is going to be more capable of carrying the weight of inflation on their shoulders."

Marriott International shares fell 2.9% after the hotel chain said it swung to a loss for the first quarter.

In bond markets, the yield on the 10-year Treasury ticked up to 1.580%, from 1.576% Friday.

In commodities, copper futures on CME Group's Comex in New York notched a record, rising 1.9% to $4.84 a pound. Bets on a U.S.-led global economic rebound that would boost demand for metals used in manufacturing and construction has bolstered prices.

Overseas, the pan-continental Stoxx Europe 600 edged up 0.5%.

The British pound rose 1% against the dollar. The Scottish National Party fell one seat short of an outright majority in the country's parliament, prompting optimism that Scotland may avoid holding another vote on splitting away from the U.K.

"The market consensus is that if the SNP didn't get a majority, then potentially the Scottish referendum became less of a threat," said Jane Foley, head of foreign-exchange strategy at Rabobank. But the potential for the SNP to work with other parties to achieve a vote on independence could cause sterling to be volatile in the coming months, she added.

In Asia, South Korea's Kospi advanced 1.6%, and the Shanghai Composite Index added 0.3%. Japan's Nikkei 225 rose by almost 0.6%.

Australia's S&P/ASX 200 closed 1.3% higher as mining stocks pulled the index to its first record since the onset of the Covid-19 pandemic.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

(END) Dow Jones Newswires

May 10, 2021 10:28 ET (14:28 GMT)

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