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Stocks fall to start the week as tech stocks drag down market, Nasdaq loses 2.5%

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Technology shares led the broader market lower on Monday as investors dumped high-flying Big Tech stocks, pushing the Dow Jones Industrial Average and the S&P 500 off their record highs.

The Nasdaq Composite dropped 2.5% to 13,401.86, finishing the day at its session low as Microsoft and Apple lost more than 2% each. Tesla shed more than 6%. The Dow cut gains and turned negative rapidly in the final minutes of the session after climbing more than 300 points to another record high. The blue-chip Dow ended the day 34.94 points, or 0.1%, lower at 34,742.82. The S&P 500 fell 1% to 4,188.43, slipping from a record closing high.

Investors rotated out of growth names, resuming a trend seen earlier this year amid rising fears of inflation and higher interest rates. Facebook dropped more than 4%, while Amazon and Netflix both dropped over 3%. Alphabet dipped more than 2% after a downgrade by Citigroup. Cathie Wood's Ark Innovation ETF fell 5% to its lowest level since November.

"The tech price action is especially frustrating for many as the thought was Friday would elicit a more sustainable rebound in the space," Adam Crisafulli, founder of Vital Knowledge, said in a note. "Instead, the group is seeing aggressive selling and accumulating technical damage as prices breach key levels."

Technology stocks rallied on Friday after a far-weaker-than-expected April jobs report eased concerns about a policy change from the Federal Reserve. Tech stocks have been winning under the low-rates regime during the pandemic.

Utilities and consumer staples were the two biggest gainers on Monday. Earlier in the session, investors had bid up shares that stand to benefit the most from the economic recovery, including energy, financials and industrials, but the sharp sell-off in tech weighed on sentiment and caused these shares to roll over.

Wall Street came off a mixed week with the Dow and the S&P 500 advancing 2.7% and 1.2%, respectively. Despite a 0.9% rally on the week's final session, the Nasdaq Composite shed 1.5% over the same period.

The stock market confirmed the so-called "Dow Theory" bullish breakout last week when the Dow Jones Industrial Average and the Dow Jones Transportation Average reached new highs simultaneously.

Transportation stocks are widely viewed as a barometer of global economic activity. The rebound in these shares signals an accelerating recovery from the pandemic.

Still, April's jobs report showed that U.S. employers added 266,000 net payrolls last month. Economists polled by Dow Jones had expected 1 million additions.

Gasoline futures experienced volatile trading after a ransomware attack forced the closure of the largest U.S. fuel pipeline over the weekend. Colonial Pipeline, which operates a 5,500-mile system, said Monday afternoon that parts of its system are being brought back online, and it hopes to restore service by the end of the week.

Gasoline futures ended the day 0.31% higher at $2.1334 per gallon. At one point in the overnight session, gasoline futures jumped as high as $2.217, levels not seen since May 2018.

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