Updates after markets open

By Shashwat Chauhan and Joel Jose

June 26 (Reuters) - The S&P 500 and the Nasdaq were on pace for steep weekly losses as chipmakers came under renewed selling pressure on Friday after a stellar run this quarter, with investors questioning high valuations and the repercussions of massive AI spending by companies.

Micron Technology MU.O slid 6.2% after jumping more than 15% in the previous session. Other chip stocks, including Advanced Micro Devices AMD.O and Nvidia NVDA.O, were also reeling, with the Philadelphia SE Semiconductor index .SOX dipping 4.7%.

High-flying chipmakers hit a rough patch this week despite strong earnings from market darling Micron, while Apple's AAPL.O move to raise iPad and MacBook prices due to soaring memory and storage chip costs stoked inflation concerns.

Apple shares edged down 0.1% in early trading after a 6.1% slump on Thursday, their biggest one-day drop in over a year, following the price hikes.

"The selling in the tech stocks is reflecting higher interest rates down the road," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"Market didn't like Apple hiking prices because that could mean higher consumer prices down the line."

U.S. inflation rose above 4% in May for the first time in three years, data on Thursday showed, boosted by higher energy prices linked to the Middle East conflict, keeping the possibility of a Fed rate hike alive.

While oil prices have retreated sharply as the Middle East tensions eased, Apple's shock move to hike prices drove fresh concerns.

"We saw a similar dynamic during the pandemic, when supply chain disruptions limited access to semiconductors. Now, we're witnessing a comparable supply shock, this time driven by memory, which is creating renewed inflationary pressure," said Art Hogan, chief market strategist at B. Riley Wealth.

At 9:34 a.m. ET, the Dow Jones Industrial Average .DJI fell 229.49 points, or 0.44%, to 51,691.13; the S&P 500 .SPX lost 60.87 points, or 0.83%, to 7,296.62 and the Nasdaq Composite .IXIC lost 336.63 points, or 1.33%, to 25,021.97.

A report that OpenAI was considering delaying its public debut until next year also weighed on risk sentiment towards the tech space.

Shares of Elon Musk's SpaceX SPCX.O, which debuted earlier this month, were down 1.6%.

Recent market volatility has driven investors toward overlooked sectors poised to benefit from easing inflation concerns and stronger growth prospects.

Cooling tensions in the Middle East have further helped lift the blue-chip Dow .DJI to record highs.

Investors expected heavy trading volume on Friday to reflect changes to the Russell indexes, including reclassification for megacaps like Microsoft and the Russell 1000's "fast-track" addition of SpaceX.

Meanwhile, interest rate anxiety persisted, with traders pricing in one 25-basis-point rate hike and a near-27% chance of another by year-end, according to LSEG-compiled data.

A final reading of June consumer sentiment is due later in the day, while the monthly jobs report is due next week.

Synaptics SYNA.O rose 4.7% after ON Semiconductor ON.O said it agreed to acquire the company in an all-stock deal valued at about $7 billion. Onsemi dropped 19%.

Declining issues outnumbered advancers by a 1.37-to-1 ratio on the NYSE and by a 1.1-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and four new lows, while the Nasdaq Composite recorded 72 new highs and 91 new lows.