By Caitlin Ostroff and Gunjan Banerji

A slide in shares of technology giants weighed on the broader market Monday as investors grew wary of heightened regulation tied to the market's most enduring winners.

The S&P 500 declined 0.8%, after hitting an all-time high on Friday. The tech-heavy Nasdaq dropped 1.4%. The Dow Jones Industrial Average shed 164 points, or 0.5%.

Technology heavyweights underperformed the broader market. The storming of the Capital by President Trump's supporters is expected to spur Congressional efforts to regulate big tech. Facebook has indefinitely suspended President Trump, while Apple, Amazon.com and Alphabet Inc.'s Google slashed support for the social-media app Parler.

Facebook shares lost 3.9% shortly after the opening bell, while Apple dropped 2.1%. Shares of Twitter fell 10% on concern that the social-media company may face a backlash from regulators or users after it banned Mr. Trump's personal account, citing the risk of further incitement of violence.

Stocks had rallied in recent days on bets that a Democrat-controlled Congress will increase government spending, bolstering an economic recovery that stagnated recently.

The monthly U.S. jobs report on Friday showed that the nation's labor-market recovery stalled in December, with seven months of job growth ending. Employers cut jobs last month as coronavirus cases continued to spread across the U.S., forcing restaurants and bars across the U.S. to close or scale down. Experts have warned this month of surges in new cases, hospitalizations and deaths after December's holiday gatherings and travel.

Market sentiment is dimming at the start of the new week as investors confront a number of risks. On the political front, House Speaker Nancy Pelosi (D., Calif) said the House may move to impeach President Trump as soon as this week. That is prompting concern that fresh rancor in Washington may diminish support for other important measures.

"Everything is a little bit bumpier than we expected it to be a week ago, " said Luca Paolini, chief strategist at Pictet Asset Management. "It feels like 2020 hasn't really ended. We are in the middle of a pandemic, we are still talking about U.S. politics even more than before. The underlying story is still pretty much the same."

The expectation of additional stimulus has pushed government-bond yields higher in recent days as investors bet that on an uptick in economic growth and inflation. There is also a growing expectation that the government will issue more notes to pay for additional stimulus.

On Monday, the yield on the 10-year Treasury note edged up to 1.112%, from 1.105% Friday. Yields rise when bond prices fall.

The rise in yields is raising questions about how the Federal Reserve may respond, investors said.

"Rates markets have been working with an assumption that the Fed is going to intervene to prevent a sharp increase in yields," said Hani Redha, a portfolio manager at PineBridge Investments. "All eyes are going to be on the Fed to understand what their reaction is going to be."

In corporate news, shares of NIO jumped about 10% after the electric-vehicle maker unveiled its fourth production model at its annual "NIO Day" Saturday. NIO has become wildly popular among investors, drawing endless chatter across social media and heavy trading volumes.

Eli Lilly shares jumped around 12% after it said an experimental Alzheimer's drug helped patients in a small trial.

To some investors, Monday's moves looked like a pause after a tremendous record run. The Dow on Friday notched its third record close of 2021.

"You have to step back a little bit and see the phenomenal run we've had over the past week, especially post the Georgia results," said Mr. Redha. "This was a natural consolidation, some profit-taking perhaps."

The ICE U.S. Dollar Index, which tracks the strength of the greenback against other currencies, strengthened by 0.6%. The dollar often rises when broader markets decline because many investors view it as a safe-haven currency.

Overseas, the pan-continental Stoxx Europe 600 fell 0.8%.

China's Shanghai Composite declined 1.1% by the close of trading, while Hong Kong's Hang Seng edged 0.1% higher. Japan was closed for a holiday.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Gunjan Banerji at Gunjan.Banerji@wsj.com

(END) Dow Jones Newswires

01-11-21 1012ET