* Rising bets on Fed hikes keep yen near 40-year lows
* Tech stocks including SpaceX tumble; South Korea's Kospi
plunges 10%
* Brent crude and gold both fall
(Updates throughout)
By Amanda Cooper
LONDON, June 23 (Reuters) - Global stocks fell on Tuesday,
led by broad-based declines in technology shares, including
SpaceX, as growing expectations for the Federal Reserve to be
more aggressive in tackling inflation drove investors into bonds
and the dollar.
Futures on the Nasdaq were down more than 2.5%,
suggesting Monday's 1.3% slide might extend into a second day.
Shares in SpaceX struggled to push into positive
territory in Tuesday's premarket, after having lost nearly 17%
on Monday, while the likes of Alphabet, Meta Platforms
and Microsoft also tumbled.
S&P 500 e-mini futures were down 1.2%.
The STOXX 600 fell 0.8%, under pressure from declines
in European semiconductor and chip-equipment makers, which
followed declines in tech stocks in Japan and South Korea, where
Seoul's KOSPI index fell 10% in its largest one-day
selloff since March.
"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
Meanwhile, Brent crude futures remained below $80 a barrel
on Tuesday, as the number of vessels transiting through
the Strait of Hormuz continued to build, with oil prices in the
physical market almost back to pre-war levels.
A drop in oil prices would ordinarily give stocks a
boost, but investors are now focused on what the surge in energy
prices will mean for central bank policy and, specifically, the
Federal Reserve. New chair Kevin Warsh looks set to take a much
tougher line on inflation.
As such, 2-year Treasury yields, which are the most responsive
to shifts in expectations for inflation and rates, have shot to
their highest levels in 16 months, while longer-dated yields
have also risen sharply. On Tuesday, 2-year and
10-year yields were both down around 3 basis points
on the day at 4.20% and 4.49%, respectively.
"The adjustment higher in U.S. yields is creating a more
challenging backdrop for risk assets in the near term after
strong gains in recent months," MUFG currency strategist Lee
Hardman said.
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.
JAPANESE YEN AROUND 40-YEAR LOWS
Much of that strength has come at the expense of the Japanese
yen, which on Tuesday was flat at 161.58 versus the
dollar, having neared 40-year lows the previous day.
The euro fell below $1.14 to hit one-year lows in
response to investors cutting back their bets on the European
Central Bank raising rates much further.
Japanese Finance Minister Satsuki Katayama said on Tuesday
she had held an online meeting with U.S. Treasury Secretary
Scott Bessent a day earlier to discuss global financial markets,
which analysts said suggested an increased risk of official
intervention from Tokyo to prop up the yen.
Meanwhile, on the 10th anniversary of the Brexit vote that saw
Britain leave the European Union, the pound was down 0.3% to
$1.3216. Sterling was dented on Monday after British Prime
Minister Keir Starmer said he would resign, paving the way for
what is expected to be an orderly transfer of power to Andy
Burnham.
With expectations rising for U.S. rate rises this year, gold
came under pressure, falling 1.7% to $4,120 an ounce. In
cryptocurrency markets, bitcoin fell 3% to $62,500, while
ether dropped 4% to $1,660.