US stock market today: Nasdaq, S&P 500 futures tumble up to 3% as tech selloff deepens; Micron slides 7%

As the sell-off in technology stocks deepened, US stock futures pointed to a sharply lower start on Tuesday, 23 June, with Nasdaq 100 futures tumbling 2.8%and S&P 500 futures declining 1.4%.

In the previous session, the Nasdaq Composite fell more than 1.3% amid heavy selling in Alphabet and other technology stocks. The weakness spilt over into Asian markets on Tuesday, dragging South Korea's Kospi down 10% and triggering a circuit breaker, marking one of its sharpest intraday declines in recent years.

A large part of the sell-off was driven by memory-chip giant SK Hynix, whose shares tumbled after the company reportedly slowed production of advanced AI chips to increase commodity DRAM capacity. The move reinforced concerns that the pace of AI-related data centre spending may not fully justify current market valuations.

Other major regional indices, including Japan's Nikkei 225, India's Nifty 50, and Hong Kong's Hang Seng Index, also ended the session with steep losses.

Domestic brokerage firm Vested Finance said the sell-off reflects growing investor concerns over whether massive AI-related spending can continue to justify elevated valuations. After a year of relentless gains, markets are becoming increasingly sensitive to earnings expectations and the outlook for interest rates.

Attention now turns to Micron's earnings, which could provide an important read on AI-related demand after the stock surged more than 300% since the start of the year.

Apart from weakness in technology shares, growing expectations of a potential US Federal Reserve interest rate hike later this year also weighed on investor sentiment.

Traders now see an 88% probability of a rate hike in December, up from 61% before the Fed meeting last week, according to the CME FedWatch Tool, as investors price in a more hawkish monetary policy stance under new Fed Chair Kevin Warsh, Reuters reported.

Chicago Fed President Austan Goolsbee said that with the labour market remaining stable, policymakers are focused on determining whether inflation will remain elevated or gradually ease as the effects of tariffs fade and tensions in the Middle East subside.

"The recent rise in interest-rate expectations remains a key challenge for technology stocks. Markets increasingly believe Fed Chair Kevin Warsh will maintain a tough stance on inflation, keeping borrowing costs higher for longer. That environment tends to weigh most heavily on growth and technology companies, whose valuations depend heavily on future earnings," said domestic brokerage firm Vested Finance.

Investors are now awaiting the US Personal Consumption Expenditures (PCE) data, the Federal Reserve's preferred inflation gauge, due on Thursday, for further cues on the future path of monetary policy.

Crude oil prices remain under pressure for a second day

Brent crude futures fell for a second straight session, edging 0.3% lower towards $77.70 a barrel. US crude futures were down 3% at around $74 a barrel.

Traders are taking comfort from signs that negotiations between the US and Iran are progressing, with Washington reportedly issuing a 60-day licence allowing Tehran to sell oil in international markets.

Last week, the US signed an interim agreement with Iran under which it eased restrictions on Iranian ports and allowed the country to resume oil exports. The agreement also includes the unfreezing of certain Iranian assets, though the implementation timeline remains unclear.

US stocks in focus today

Among individual stocks, Micron Technology and AMD plunged around 7% and 6%, respectively, while Intel also fell 6%. Among the "Magnificent Seven" stocks, Nvidia and Alphabet each dropped 2%, while Tesla declined 2%.

Primoris Services tumbled 35% after cutting its full-year earnings guidance.

Elsewhere, IBM gained 4% after a brokerage upgrade and its partnership with OpenAI's cybersecurity programme, while Edgewell Personal Care surged 9% after rejecting a takeover offer, Bloomberg reported.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.