A look at the day ahead in European and global markets from Rae Wee

An ugly selloff in technology stocks swept across Asia on Monday as investors slammed the brakes on the red-hot AI rally, with a more than 8% fall in South Korea's KOSPI triggering circuit breakers.

The moves followed that of last week's shakeout on Wall Street, after a blowout U.S. jobs report ramped up expectations for Federal Reserve interest rate hikes - a bane for growth stocks.

Markets are now pricing in a more than 70% chance that the Fed will raise rates in December, up from a 45% chance a week ago, according to the CME FedWatch tool.

Friday's nonfarm payrolls report came just days after Broadcom's ( AVGO ) underwhelming results last week, which sent its stock slumping and dragged share prices of other technology companies lower.

But that's the price to pay for perfection - when expectations run so high, even a small miss can deliver a huge blow.

Analysts and investors have, for the most part, dismissed the latest selloff as a "healthy correction", with concentration risks and leveraged positions amplifying the market moves, though it remains to be seen how long the rout will last.

Elsewhere in markets, the dollar was at a two-month high, helped by the Fed hike bets and resilience in the U.S. economy.

The resurgent dollar pushed the yen deeper into intervention territory, leaving investors on alert for further yen-buying action from Tokyo to stem the currency's slide.

Revised gross domestic product data on Monday showed Japan's economy lost momentum in the January-March quarter from the previous three months on sluggish capital expenditure.

The data calendar for Monday is light, though the week ahead is headlined by the giant SpaceX listing and U.S. inflation data, alongside a European Central Bank policy meeting.

And the war in the Middle East rages on, with Israel saying it struck military targets in western and central Iran on Monday, even after U.S. President Donald Trump reportedly told Israeli Prime Minister Benjamin Netanyahu to refrain from further attacks.

Key developments that could influence markets on Monday:

- Boeing ( BA ) to release May numbers for deliveries and orders

- Global airline CEOs gathering for an event in Rio de Janeiro

- France: Reopening of 3-month, 4-month, 6-month and 11-month government debt auctions

- Germany: Reopening of 5-month and 11-month government debt auctions

(Editing by Sonali Paul)