Global Markets: Stocks fall as chipmakers and tech slump on rate bets

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Rising bets on Fed hikes keep yen near 40-year lows
Tech stocks including Nvidia and Tesla; South Korea's Kospi plunges 10%
Brent crude and gold both fall
New throughout, udpates headlines and adds analyst comment
By Amanda Cooper and Chibuike Oguh

    NEW YORK/LONDON, June 23 (Reuters) - Global stocks fell on Tuesday, dragged lower by a broad selloff in technology and semiconductor shares as profit-taking set in and investors braced for more aggressive Federal Reserve action on inflation.
On Wall Street, the tech-heavy Nasdaq led losses, with semiconductor and some megacap stocks under pressure.
Nvidia NVDA.O fell 3% and Tesla TSLA.O dropped 5%, while shares in SpaceX SPCX reversed early declines to trade up 1.6%. Chip stocks .SOX were down 7%.
The Dow Jones Industrial Average .DJI was up 0.06%, the S&P 500 .SPX fell 1%, and the Nasdaq Composite .IXIC fell 1.6%.
"If you look at the technical indicators, the SOX was at its most overbought level in the last three years so there's definitely an element of expectations getting stretched, market positioning getting stretched, and valuations getting stretched," said Amanda Agati, chief investment officer at PNC Asset Management Group.
European shares also declined, with the STOXX 600 .STOXX down 0.51%, weighed by losses in semiconductor and chip-equipment makers. The weakness followed declines across Asia, where Seoul’s KOSPI index .KS11 plunged 10% in its sharpest one-day drop since March. MSCI's gauge of stocks across the globe .MIWD00000PUS fell 1.26%.
"Questions are once again being raised over AI infrastructure spending, particularly as some corporate giants plan to sell equity to help fund expansion," Trade Nation senior market analyst David Morrison said.
"Time will tell if this is yet another ‘buy the dip’ opportunity, or a harbinger of worse things to come."
     
OIL REMAINS BELOW $80 A BARREL
Oil prices remained subdued, with Brent crude holding below $80 a barrel as tanker traffic through the Strait of Hormuz increased and physical market prices neared pre-conflict levels.
The U.S. agreed to waive sanctions on Iran for 60 days from Monday after the first round of talks under a nascent peace deal agreed last week on ending more than three months of war.
While lower oil prices would typically support equities, investor focus has shifted to the inflation outlook and central bank policy. Markets now expect the Fed to take a firmer stance on inflation under Chair Kevin Warsh.
U.S. Treasury yields have surged in recent sessions, with 2-year yields — highly sensitive to rate expectations — hitting 16-month highs. On Tuesday, both 2- and 10-year yields were modestly lower on the day at 4.20% and 4.48%, respectively.
Money markets show investors are close to fully pricing in a rate rise by September. Against that backdrop, the dollar is at one-year highs against a basket of currencies.
"The data to me does not suggest that they need to be raising rates. It suggests they need to sit on pause for a while and see if the Middle East-conflict driven inflation data unwinds as a function of the negotiations and the deal," Agati said.
     
YEN AT 40-YEAR LOWS
Money markets are now close to fully pricing in a rate hike by September, helping push the dollar index =USD to one-year highs against a basket of currencies. The index was last up 0.32% to 101.33.
The dollar’s strength has weighed heavily on the Japanese yen JPY=, which hovered near 40-year lows at 161.53 per dollar. The euro EUR slipped below $1.14 to its lowest level in a year as investors scaled back expectations for further European Central Bank tightening.
Japanese Finance Minister Satsuki Katayama said she discussed global financial markets with U.S. Treasury Secretary Scott Bessent on Monday, a move analysts said could signal rising risk of intervention to support the yen.
In Britain, the pound  GBP= fell 0.35% to $1.3201 on the 10th anniversary of the Brexit vote. Sterling remained under pressure after Prime Minister Keir Starmer said he would resign, paving the way for what is expected to be a smooth political transition to Andy Burnham.
Gold XAU= also declined, falling 1.5% to $4,127 an ounce as higher rate expectations reduced the appeal of non-yielding assets.
In cryptocurrencies, bitcoin BTC= fell 2.95% to $62,475.67. Ethereum ETH= declined 4.12% to $1,661.63.
     

 (Reporting by Chibuike Oguh in New York; Additional reporting by Rocky Swift in Tokyo; Editing by Aurora Ellis)
 ((chibuike.oguh@thomsonreuters.com))