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CRUISIN FOR A BRUISIN: STOCKS SET FOR TECH-DRIVEN SELLOFF

Futures suggest Wall Street is in for quite a drop at the opening bell, with Nasdaq NQcv1 and S&P 500 EScv1 e-minis down 1.5% and 3.0%, respectively.

U.S. stocks would be following the example of their global counterparts; Europe's STOXX 600 .STOXX is off about 0.9%, the Nikkei .N225 plunged 3.6%, the Hang Seng .HSI slid 1.8%. The MSCI World index .MIWD00000PUS is down 0.9%.

Why so jittery?

Expectations for interest rate hikes from the Federal Reserve are looking more likely, for one. That hurts the megacaps, including the Magnificent Seven group of AI-related momentum stocks that account for an oversized chunk of S&P 500 total market cap and have driven the stock market to record highs, even amid geopolitical strife, upward inflation pressures and intermittent signs of economic softness and consumer strain.

Financial markets are currently pricing in a 45.7% chance that Warsh & Co will hike rates as soon as October, according to CME's FedWatch tool.

Second, there's that persistent, nagging worry that the massive scale of expenditures on AI technology and infrastructure, and when/if those enormous outlays will begin to pay off.

It's a worry that doesn't seem to be going away.

In five of the last 11 sessions, the Nasdaq dropped more than 1%. The index is now 3.2% below its record closing high reached on June 2, but remains up 12.6% year-to-date.

On the geopolitical front, the United States has waived sanctions on Iran for 60 days as the peace talks inch along, with U.S. President Donald Trump warning he will "do what I have to do" if Tehran fails to stick to its side of the agreement.

The only piece of economic news on Tuesday's docket is S&P Global's initial "Flash" purchasing managers indexes (PMI) for the manufacturing and services sectors.

The party gets started on Thursday, when the Commerce Department drops its PCE, GDP and durable goods reports.

(Stephen Culp)

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EARLIER ON LIVE MARKETS:

DISREGARD EUROPEAN CHEMICALS' Q2 EARNINGS BEATS CLICK HERE

HEDGE FUNDS BLINK FIRST IN CROWDED AI TRADE CLICK HERE

IS THE EURO ZONE INFLATION SCARE OVER? CLICK HERE

DRINKS AND DRUGS OFFER SHELTER AS STOXX DROPS 1% CLICK HERE

BEFORE THE BELL: TECH SELLOFF TO DRAG EUROPE LOWER CLICK HERE

YEN ZOOMS INTO TROUBLE CLICK HERE