Financial Markets                      06/23 15:27

   

   Wall Street gave up more of its recent gains Tuesday after a sell-off in big 
technology stocks spread from Asia back to the U.S. over worries about 
potentially higher interest rates by the end of the year.

   The S&P fell 1.4%. The benchmark index is coming off 11 weekly gains out of 
the last 12, led largely by technology stocks. The Dow Jones Industrial 
Average, which is less influenced by tech stocks, gave up an early gain and 
closed just 0.1% lower. The Nasdaq composite fell 2.2%.

   Markets throughout Asia fell. South Korea's Kospi index, a big winner in the 
AI boom, sank 10%. Stocks in Europe also fell.

   The selling largely targeted companies that have seen their values surge 
amid the frenzy over artificial intelligence technology. Their pricey stock 
values give them more influence over the broader market's direction. On 
Tuesday, more stocks gained ground within the S&P 500 than fell, but tech 
companies overpowered gains elsewhere.

   Micron Technology slumped 13.2% and Nvidia fell 4.1%. Samsung Electronics 
slumped 12.3% in South Korea.

   SpaceX wavered in early trading then closed 1% higher. The space exploration 
and artificial intelligence company had a soaring market debut less than two 
weeks ago. The company plans to raise money through a bond offering, partly to 
fund AI development.

   The growing likelihood of interest rate hikes later this year has helped 
deflate the massive run-up in AI-related stocks in recent days as traders worry 
that the higher rates could hamper economic growth.

   Those Big Tech gains have been significant, sending major indexes on 
record-setting runs throughout 2026. Within the S&P 500, the tech sector alone 
is up 25.5% just over the last three months and 16.6% for the year. In Asia, 
South Korea's Kospi has nearly doubled so far in 2026, even after Tuesday's 
plunge.

   Analysts have been warning that high-flying technology stocks could be due 
for a downturn.

   "Viewed through this lens, a period of consolidation is reasonable, in our 
view, after such a sharp move higher," wrote Brock Weimer, investment strategy 
analyst at Edward Jones, in a research note.

   Many technology companies have been spending heavily on AI technology. The 
potential for higher interest rates can stifle future spending and hurt prices 
for investments. The Federal Reserve has signaled that it could raise interest 
rates at least once before the end of the year. Wall Street sees an 85% chance 
that the central bank will raise its benchmark interest rate this year, 
according to date from CME Group. That's compared to 60% a week earlier.

   The yield on the 10-year Treasury slipped to 4.50% from 4.51% late Monday. 
The yield on the 2-year Treasury fell to 4.20% from 4.24% late Monday. Bond 
yields remain high, though, amid worries about inflation.

   Inflation has been heating up throughout the year. The impact from tariffs 
helped halt and reverse what had been an easing of inflation growth. The U.S. 
war with Iran quickly pushed energy prices higher, including gas prices. Higher 
energy costs have also made shipping more expensive for a wide range of goods, 
and that has been weighing on businesses and households. A report due Thursday 
with an inflation measure that is preferred by the Fed is expected to show that 
inflation rose to 4.1%, in May.

   Oil prices have eased amid negotiations between the U.S. and Iran to end 
their war. The price for a barrel of U.S. crude for August delivery fell 0.9% 
to settle at $73.21. The September delivery price for a barrel of Brent crude, 
the international standard, fell 0.9% to settle at $76.80. Prices are still 
above levels of roughly $70 per barrel before the war began.

   All told, the S&P 500 fell 107.33 points to 7,365.46, while the Nasdaq 
dropped 579.56 points to 25,587.04. The Dow lost 45.87 points to close at 
51,666.84.

   ___

   AP Senior Producer Mayuko Ono in Tokyo contributed to this report.

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