As you were on a STAR I'm guessing your lateral profile was accurate. When given the speed by ATC you opened the speed window and decelerated earlier than planned. The aircraft pitched for this speed and in doing so deviated above the VNAV profile. Although the FMC CDU displays the MCP selected speed, the PATH is still based on the previously entered (now hidden) speed. You now select flap, VNAV PATH annunciates and the aircraft pitches down to regain the profile - accelerating in the process. What you could have done is simply type the new ATC speed directly into the DES page. Even if you do opt to open the speed window, I'd still recommend typing the new speed into the descent page in order to update the vertical profile with the new speed.