* Futures down: Dow 0.57%, S&P 500 1.5%, Nasdaq 2.9%

* Russell 2000 futures fall 1.6%

* Mega-cap tech, chip shares lead selloff

* CBOE Volatility Index at an over one-week high

(Updates with prices)

By Johann M Cherian and Twesha Dikshit

June 23 (Reuters) - Futures tracking the tech-heavy Nasdaq

fell more than 2% on Tuesday, leading declines on Wall Street,

as concerns about looming U.S. rate hikes and debt-backed

corporate spending on AI weighed on investor sentiment.

The weakness follows a sharp selloff in U.S. tech

heavyweights in the previous session, driven by doubts over

hyperscalers' heavy AI spending, amid elevated valuations and

high borrowing costs.

Mega-cap names dropped in premarket trading, with Nvidia ( NVDA )

and Alphabet down nearly 3% each, while

chipmakers Intel ( INTC ), Marvell Technology ( MRVL ) and

Advanced Micro Devices ( AMD ) fell between 6.3% and 8.2%.

"The move looks more like a sentiment-driven correction than

a fundamental shift in the AI and earnings narrative, but it

highlights how dependent market leadership has become on a

relatively small group of growth-focused stories," said Daniela

Hathorn, senior market analyst at Capital.com.

Shares of Elon Musk's SpaceX logged their biggest

single-day drop on Monday since their trading debut. It became

the latest megacap to tap the bond market following a

blockbuster IPO earlier this month. The stock was down 4.2% in

premarket trading.

"SpaceX is not yet part of the Nasdaq indexes, but the fact

that it is jumping on the bond train to fund excessive AI and

infrastructure spending revives earlier concerns that Big Tech

may be spending too much on AI infrastructure and increasingly

financing that spending through debt," said Ipek Ozkardeskaya,

senior market analyst at Swissquote Bank.

At 06:42 a.m. ET, Dow E-minis were down 297 points,

or 0.57%, and S&P 500 E-minis were down 113 points, or

1.5%. Nasdaq 100 E-minis were down 891.75 points, or

2.91%.

Futures tracking the rate-sensitive Russell 2000 Index

fell 1.7%. The CBOE Volatility Index, Wall

Street's fear gauge, was at an over one-week high, climbing 2.78

points to 20.06.

Traders expect the U.S. Federal Reserve to hike borrowing

costs by a total of 50 basis points by December, according to

the CME Group's FedWatch Tool, up from one 25-basis-point hike

two weeks ago, as investors price in hawkish monetary policy

under new Chair Kevin Warsh.

The yield on the short-term 2-year Treasury note

slipped about 4 bps to 4.19%. In the previous session, the yield

touched its highest point since February 2025.

After a strong rally earlier this quarter in the aftermath

of the Middle East ceasefire, concerns over stretched valuations

in AI-related stocks have resurfaced.

Chip stocks advanced on Monday, lifting the Philadelphia SE

Semiconductor Index to a fresh record high, up roughly

106% so far this year. Micron's results on Wednesday

could offer some clues on the outlook for the memory and AI chip

sector.

Micron tumbled 8.9%, while Sandisk ( SNDK ) and

Western Digital ( WDC ) fell 9.6% and 7.8%, respectively.

Investors are keeping a close eye on developments in the

Middle East after the U.S. waived sanctions on Iran for 60 days

after the first round of talks under a nascent peace deal, with

U.S. President Donald Trump saying he will "do what I have to

do" if Iran does not stick to its side of the agreement.

Later in the day, attention will turn to a batch of private

surveys on June business activity, ahead of the closely watched

Personal Consumption Expenditures Index data, the Federal

Reserve's preferred inflation gauge, on Thursday. Economists

expect the price index to come in at about 4.1%, more than

double the central bank's target.