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GLOBAL MARKETS-Stocks drop as Fed rate bets hit tech royalty; dollar gains  
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GLOBAL MARKETS-Stocks drop as Fed rate bets hit tech royalty; dollar gains  
Jun 23, 2026 5:53 AM

* 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.

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