NEW YORK — U.S. stocks fell from records Monday, led by a plunge among small companies, as investors weighed valuations and speculated the Federal Reserve may raise interest rates sooner than expected.

GT Advanced Technologies sank 16 percent after Canaccord Genuity downgraded the stock to hold from buy. Expedia slid 1.7 percent after agreeing to make a $658 million acquisition. Peabody Energy fell 3.7 percent to lead energy producers lower. PetSmart gained 2.5 percent after a second large shareholder prodded the company to consider selling itself.

The Standard & Poor’s 500 Index fell 0.4 percent to 1,977.65 at 4 p.m. Monday in New York. The Dow Jones Industrial Average dropped 44.05 points, or 0.3 percent, to 17,024.21. The Russell 2000 Index of small companies slid 1.8 percent, the most since April. About 5.1 billion shares changed hands Monday on U.S. exchanges, 14 percent below the three-month average.

“Rates are going to go up before people expect,” Tom Stringfellow, president and chief investment officer of San Antonio-based Frost Investment Advisors, which manages about $10 billion, said in a phone interview. “And when rates do go up, I expect some sort of a knee-jerk reaction. But I don’t believe for a moment that the Fed’s going to raise rates at a speed that derails this stable environment.”

Both the S&P 500 and the Dow average advanced 1.3 percent last week, with the 30-stock gauge closing above 17,000 for the first time, as monthly payroll addition exceeded 200,000 for a fifth month in June.

The Russell 2000 last week recovered nearly all its losses from a two-month selloff of Internet and small-cap shares, coming within a point of an all-time high.

Goldman Sachs brought forward its forecast for the Fed to raise interest rates, joining companies including JPMorgan Chase and Bank of Tokyo-Mitsubishi UFJ in moving up estimates following the jobs data last week.

Policy makers have kept their target for overnight lending between banks in a range of zero to 0.25 percent since December 2008. The central bank will publish the minutes of its June 17-18 meeting on Wednesday.

Fed Chair Janet Yellen said on July 2 that concerns about financial stability shouldn’t prompt a change in current policy. Three rounds of monetary stimulus from the Fed and better than- forecast corporate earnings have driven the S&P 500 up more than 190 percent from its March 2009 bottom.

The equities benchmark is trading at 16.7 times the projected earnings of its members, higher than the five-year average multiple of 14.3. The Chicago Board Options Exchange Volatility Index, the measure known as VIX that tracks investors’ estimate of future volatility, slumped last week to the lowest level since February 2007. The gauge surged 9.8 percent to 11.33 Monday, the biggest gain since June 24.

“There may be some concern about earnings, but this is basically a market being driven by an improving economy and guarantees by the Federal Reserve that they’re not going to raise interest rates,” Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird said in a phone interview.

Alcoa will unofficially open the second-quarter earnings-reporting season on Tuesday.

Seven of the 10 main S&P 500 groups retreated Monday.

Peabody Energy fell 3.7 percent, as energy stocks lost 0.6 percent as a group. Chesapeake Energy dropped 4.6 percent as the price of natural gas posted the biggest one-day drop in four months in New York.

Expedia fell 1.7 percent to $80.85. The online travel- booking service agreed on Sunday to buy Australia’s Holdings for about $658 million.

PetSmart gained 2.5 percent to $68.95. Shareholder Longview Asset Management sent a letter to the board of the pet- supply retailer on Monday saying the company should consider a sale. PetSmart, under pressure from hedge fund Jana Partners to pursue alternatives including a sale, said earlier it is reviewing changes to its capital structure to return more money to shareholders.