The broad S&P 500 slipped 0.1%, while the Dow Jones Industrial Average retreated about 50 points, or 0.1%. The Nasdaq Composite slid 0.1%.
Most stocks in the S&P 500 declined a day after the benchmark hit its 24th record close of the year, with minor losses accumulating in the healthcare, material, utility, technology and communications sectors.
A strong start to earnings season among U.S. companies and indications that the economy is rebounding have helped to lift stocks to a series of all-time highs. Still, some investors are cautious, pointing to risks stemming from elevated valuations, the potential for a jump in inflation and the raging epidemic in India.
“We’ve got a big week of tech earnings where valuations are probably a bit more stretched than in other areas,” said Stuart Rumble, investment director at Fidelity International.
Among the stocks falling were shares of Tesla. The electric car maker’s stock slid 3.6% despite posting record profit in the first quarter. Shares of Tesla have struggled this year amid a series of challenges including an investigation into a crash of a Model S sedan earlier this month in Texas, rising just 0.6% since the end of December. Shares remain up more than 300% over the past 12 months.
General Electric slipped about 3.9% after the company’s jet-engine business and divestitures weighed on its quarterly results. And profits shrank at Eli Lilly, pushing shares down 3%.
United Parcel Service shares jumped 11% after the delivery company topped forecasts for profit and revenue. Lyft, which said Monday it was selling its self-driving division to a unit of Toyota Motor, rose 2.4%.
Some investors say stocks face a bumpy ride in the coming months, pointing to signs of excess in cryptocurrencies and other corners of financial markets.
“It may make sense to take a couple of chips off the table,” said Daniel Egger, chief investment officer at St. Gotthard Fund Management. Surveys showing that individual investors are extremely bullish suggest stocks are vulnerable to a pullback, according to Mr. Egger.
The yield on 10-year Treasury notes rose to 1.583%, from 1.568% Monday. Yields, which move inversely to bond prices, are on course to advance for a third-consecutive session.
Officials on the Fed’s rate-setting committee are due to gather for the start of their regular policy meeting, which will conclude Wednesday. Monica Defend, global head of research at Amundi, said she doesn’t expect the central bank to adjust monetary policy.
The New York Stock Exchange on Monday.
Photo: shannon stapleton/Reuters
Ms. Defend said the French asset manager is focused on earnings in the U.S. and Europe. “We really need the real economy to back up the equity market,” she said.
In overseas markets, losses for financial-service, auto and basic-resource stocks weighed on the Stoxx Europe 600, which ticked down 0.2%.
Among individual European companies, shares of UBS Group fell almost 3%. The Swiss lender said it had lost $774 million from the implosion last month of Archegos Capital Management, a bigger hit than analysts expected.
In Asian markets, Japan’s Nikkei 225 ended the session down 0.5% and China’s Shanghai Composite Index closed up less than 0.1%.
-Michael Wursthorn contributed to this article.
Write to Joe Wallace at Joe.Wallace@wsj.com
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