U.S. stocks witnessed a decline on Tuesday, with indications of a strong economy pushing bond yields up, leading investors to reevaluate high stock prices.

The S&P 500 index dropped by 1.1%, finishing at 5,909, while the tech-oriented Nasdaq Composite Index fell 1.9%, or 375 points, ending around 19,490. The Dow Jones Industrial Average decreased by 0.4%, closing at 42,528.

A report detailing economic activity in the services industry indicated strong growth, with one price gauge reaching its highest level in almost two years. Additionally, the Labor Department’s Job Openings and Labor Turnover report revealed that there were 8.1 million job openings in November, significantly surpassing analysts’ predictions.

The yield on the 10-year U.S. Treasury note rose by 7 basis points to 4.68 during midday trading. This rise in bond yields often occurs when bond prices fall, a situation typically associated with rising inflation.

At the beginning of the week, investor optimism had been inspired by technological advancements. Jensen Huang, CEO of Nvidia, made a speech on Monday evening during the annual Consumer Electronics Show in Las Vegas. While Nvidia shares jumped by 3.5% on Monday, they fell by 6% on Tuesday.

Bill Smead, the founder and chairman of Smead Capital Management, which manages over $7.5 billion, remarked that current high valuations for tech companies might be reaching a peak.

“It’s common for a select group of stocks to push the S&P 500 to new highs, and that’s the scenario we’re witnessing,” Smead noted in an interview. “However, it’s noteworthy that even the top performers are starting to struggle.”

Tesla has experienced fluctuating stock prices lately, especially after its annual deliveries declined for the first time, while competitors showed increasing demand. The electric vehicle manufacturer’s stock dipped again on Tuesday. Additionally, shares of Nvidia have been inconsistent over the last month, including Tuesday, despite a positive reception to Huang’s keynote.

“We’re beginning to notice some early warning signs,” Smead stated.

Among the various sectors of the S&P 500, only the energy sector posted gains on Tuesday. Sectors typically strong in slower economic conditions, such as utilities and consumer staples, also saw declines, as did sectors that usually benefit from robust economic activity, like consumer discretionary companies.

The U.S. stock markets will be closed on Thursday to honor former President Jimmy Carter’s funeral. The highly anticipated monthly jobs report from the Labor Department will be released on Friday.

This story has been updated with additional information