U.S. stocks tumbled Tuesday as rising bond yields deepened a rout in shares of technology companies.

The $S&P 500 index(.SPX.US)$ fell 2%, a second straight day of losses. The tech-heavy $Nasdaq Composite Index(.IXIC.US)$ slid 2.8%, while the $Dow Jones Industrial Average(.DJI.US)$ shed 570 points, or 1.6%, to 34299.

For much of the past decade, many investors had piled into shares of fast-growing technology companies, wagering they would deliver relatively robust profit growth even in a sluggish economic environment. This week, that trade hit a roadblock.

With the economy out of the worst of the pandemic-fueled crisis, the Federal Reserve signaled last week that it could start to reverse its pandemic stimulus programs as soon as November and raise interest rates sometime next year. That appears to have prompted an unwind of some of the market's most enduring trades -- pushing Treasury yields to their highest level in months and sending investors out of popular technology stocks.

Investors agree the economic outlook has improved significantly since 2020. But many wonder how well the market will be able to stand on its own once the Fed begins to taper its monthly asset purchases -- especially since they credit much of the market's rebound from its pandemic low to extraordinary levels of monetary and fiscal support from Washington. Some investors have also expressed concerns about the economic outlook. Inflation has made a surprising comeback this year, something some worry will start to cut into companies' profit margins. The fast-spreading Delta variant of Covid-19 has also complicated economists' efforts to forecast the global economy's growth outlook.

"People are realizing, or at least remembering, that central banks are going to have to start raising rates," said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. "The patient has become used to being given all these drugs, but soon those drugs are going to have to be reduced."

Tuesday's market selloff was broad, pulling all but one of the S&P 500's sectors lower for the day.

Traders yanked money out of the technology sector. Shares of companies like $Facebook(FB.US)$, $Alphabet -CL A(GOOGL.US)$ and $Microsoft(MSFT.US)$, each of which had vastly outperformed the broader market this year, fell more than 2.5% apiece.

Meanwhile, selling pressure accelerated in the government bond market. The yield on the benchmark 10-year Treasury note rose for a sixth consecutive day Tuesday, settling at 1.534%, compared with 1.482% Monday. Bond yields rise as prices fall.

Shares of energy companies avoided the broader selloff.

$Schlumberger Ltd(SLB.US)$ added 3.4%, while $Marathon Oil Corp(MRO.US)$ rose 1.7%. Both benefited from crude oil prices hitting multiyear highs this week, although oil wound up giving up the day's gains to end slightly lower Tuesday. Strategists have attributed the spike to a combination of rising demand and supply shortages.

The jump in commodity prices has ramped up some investors' worries about short-term inflation pressures. Inflation tends to weigh on bond prices, since it erodes the purchasing value of their fixed payments.

Some investors say the stocks' recent setbacks aren't surprising after a long period of relative calm. The S&P 500 has risen seven straight months in a row, its longest such streak since the 10 months through January 2018, according to Dow Jones Market Data.

Data suggests investors were heavily positioned in bets on lower interest rates and subdued inflation earlier this month, another factor that might have exacerbated the speed and scale of Tuesday's pullback. In a survey of global fund managers conducted Sept. 3-9, Bank of America found investors were generally betting on stock prices rising and inflation pressures easing.

"That's often how it happens -- you have quiet and complacent markets and then a gut check," said Keith Lerner, co-chief investment officer of Truist Advisory Services. Mr. Lerner added that he is still optimistic about the market's outlook over the longer term.

Elsewhere, European markets slumped, while Asian indexes were mixed.

The pan-continental Stoxx Europe 600 fell 2.2% for its third straight session of losses.

Hong Kong's $Hang Seng Index(800000.HK)$ rose 1.2% after signs of support from China's central bank helped boost beaten-down shares of Chinese real-estate developers. The People's Bank of China said late Monday it would "maintain the healthy development of the property market and safeguard the legitimate rights and interests of house buyers."

Shares of $Country Garden Holdings(02007.HK)$, $China Vanke(02202.HK)$ and $China Overseas Land & Investment(00688.HK)$ all jumped between 5% and 6%. $China Evergrande Group(03333.HK)$ rose more than 4%. $Sunac China(01918.HK)$ surged almost 15%, snapping two days of steep declines, after the property company played down a leaked plea for help from a local government, and said sales were good.

Meanwhile, Japan's Nikkei Stock Average finished down 0.2%.

Higher bond yields drew investors into the U.S. dollar, which strengthened against major currencies from the euro to the Swiss franc. The WSJ Dollar Index, which tracks the currency against a basket of others, was up 0.4% and trading around a five-week high.