June 24 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

An 8% plunge in the high-flying U.S. chip stock index on Tuesday marked a jarring injection of volatility into mid-year trading. Memory chipmaker Micron Technology fell around 13%, reversing all its gains from the day before, ahead of its earnings update today.

For an index that had doubled so far this year, maybe it just ran out of steam, but the 10% retreat in South Korea's chip-heavy and volatile KOSPI earlier in the day won't have helped either.

SoftBank CEO Masayoshi Son thinks it's "blasphemy" to think of AI as a bubble, though after this week's latest wobble, others may not be as confident.

I'll get into that and more below.

But first, check out my latest column on why a Greenspan-style approach to asset bubbles could be cause for concern under Kevin Warsh's Federal Reserve.

And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.

BUBBLE OR BLASPHEMY?

The KOSPI, other Asia bourses and U.S. futures stabilised a bit overnight after Tuesday's tech selloff, which saw the Nasdaq shed more than 2%. But the episode will prompt another bout of questions around stretched tech valuations.

Micron's earnings will be the sector's next test as investors look to learn more about the AI-driven memory chip demand that's propelled the company's stock up more than 200% this year.

SpaceX's damp squib over the past week since its IPO was another sideshow, with the rocket maker falling precipitously from its post-IPO peak. But its shares found a level above the listing price on Tuesday.

One factor gnawing at tech is pumped-up Fed rate-rise expectations since last week's policy meeting - and the wild divergence in forecasts on what might happen from here. Bank of America expects three hikes through next January, for example, while Citi still expects three cuts.

U.S. business surveys for June were above forecast, meantime, while oil prices continued to ebb toward four-month lows on U.S.-Iran talks and increased shipping activity in the Gulf, with Brent crude dipping below $76 per barrel.

In currency markets, the dollar extended recent gains on rate-hike bets, with the dollar index reaching a 13-month high and attention staying fixed on possible Bank of Japan intervention to prevent the greenback from hitting 40-year highs against the yen.

An intriguing story about how Japan's government is looking for better ways to manage its $1.3 trillion foreign exchange reserves is also grabbing attention.

In single stock moves, FedEx stock fell 6% out of hours on worries about tighter margins in its latest earnings update on Tuesday. And private credit jitters continue to rumble as Morgan Stanley joined Apollo this week with the latest report of heavy redemptions from its flagship funds.

Chart of the day

Donald Trump's overall approval rating dropped to 34%, according to the latest Reuters/Ipsos opinion poll, a return to the lowest level of the Republican president's second term that was last touched in an April survey.

Trump's approval rating on the cost of living, at 22%, was near the lowest level of his presidency and below the rating of his Democratic predecessor Joe Biden at the end of his presidency. Only 24% of Americans think the war with Iran was worth the costs, the poll showed.

Today's events to watch

-- U.S. corporate earnings: Micron Technology

-- U.S. Q1 current account (8:30 a.m. EDT), May new home sales (10 a.m. EDT)

-- U.S. 2-year floating rate note auction (11:30 a.m. EDT), 5-year note auction (1 p.m. EDT)

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