A selloff in technology stocks extended to a second day on Monday, led by losses in Apple (AAPL.O), while oil prices rose on signs of inventory declines in the United States.

The technology sector rout dragged down all three major U.S. stock indexes and raised concerns about the market's lofty levels.

The euro and its bonds rallied after pro-European parties scored in French and Italian elections over the weekend and as stocks jitters raised fresh questions for the Federal Reserve ahead of its policy meeting this week.

The Nasdaq was down 0.52 per cent after falling 1.8 per cent on Friday. Apple was down as much as 3.4 per cent, but regained some ground to close 2.46 per cent lower at US$145.32. Other tech heavyweights Alphabet (GOOGL.O), Facebook (FB.O) and Microsoft (MSFT.O) also were down.

“These stocks have grown quite appreciably from a price standpoint over the last few months. They’ve led the market, the market has become more narrow. And this is simply good old-fashioned profit taking,” said Goodreid Investment Counsel president and CEO Gordon Reid in an interview with BNN Monday. 

At the same time, energy shares, which have had the biggest declines so far this year, added to Friday's gains.

"You're seeing a rotation. You're seeing people not want to come out of the market. They're selling what's been a winner, rotating into what's been a loser because they want to stay in the market. That's not necessarily a bullish omen because when markets are at tops, people want to stay fully invested," said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

The Apple-led worries had taken a heavy toll on Asian rivals including Samsung overnight and then hit Europe's big chipmakers STMicro and Dialog.

An ebbing of the reflation trade that was based on U.S. President Donald Trump's tax and spending promises, and a run of negative U.S. economic surprises, have prompted some investors to review the mix of their portfolios.

The Dow Jones Industrial Average fell 36.16 points, or 0.17 percent, to 21,235.81, the S&P 500 lost 2.36 points, or 0.10 percent, to 2,429.41 and the Nasdaq Composite dropped 32.45 points, or 0.52 percent, to 6,175.47. 

In the foreign exchange market, Britain’s pound was under pressure, after falling more than two per cent following last week's snap elections that left the Conservatives short of a ruling majority and cast a cloud of political uncertainty over the country. Sterling fell 0.55 per cent to US$1.2650.

May's plans for leaving the EU have not changed, her spokesman said on Monday, although there were calls from Scotland to steer a course away from a "hard" Brexit.

At the same time, first round French parliamentary election results look set to give President Emmanuel Macron a huge majority to push through pro-business reforms also helped.

The dollar was steady with no major U.S. data releases and ahead of Wednesday's Fed meeting, at which the central bank is overwhelmingly expected to increase U.S. interest rates.

The dollar index, which tracks the greenback against six major currencies, was little changed at 97.248.

-- With files from BNN