Differential Erosion

Erosion can form some of the most remarkable formations. Utah and Arizona both have a complex geologic history. In the more humid areas of the world, much of structure of the rocks and hills is covered with thick vegetation. In the Southwestern part of the United States and on the Colorado Plateau particularly, all of the results of erosion are remarkably evident. These rocks are considered to be part of the Entrada Sandstone of the San Rafael Group and were formed during the Middle Jurassic Epoch, 166 to 174 million years ago. See Wikipedia: Devil's Garden (Grand Staircase-Escalante National Monument). The process of differential erosion is described by the Wikipedia article as follows:

Daily extreme temperature variations create fractures by repeated expansion and contraction of the rock in a process called thermal stress weathering. The thermal stresses can cause deep cracks that split the rock into separate pieces in an erosional process called thermal exfoliation. Precipitation causes dissolution of the fine crystalline grains that bind the larger particles together, which is known as chemical weathering. Freezing water expands in fractures making them wider and deeper in a process called frost weathering. Gravity exerts a constant downward force that creates new fractures and separates the formations along existing fractures in a process called stress relief exfoliation. High speed winds remove any loose grains from the formations and wind-borne particulates sandblast the surfaces making them smoother.

That is why there is a rounded rock sitting in a space between two larger and overhanging rocks.