Updates with early afternoon trading

By Joel Jose and Twesha Dikshit

June 10 (Reuters) - Wall Street's major indexes extended declines on Wednesday, as technology stocks remained under pressure and renewed tensions between the United States and Iran overshadowed a tame inflation reading.

Volatility has picked up across stock markets in recent days, as investors contend with a widening array of risks, including high valuations in the tech sector, escalating Middle East tensions and expectations that the Federal Reserve may need to hike interest rates to curb inflation.

The CBOE Volatility Index .VIX rose 1.84 points to 21.73, after hitting its highest level since April 7 in the previous session.

U.S. consumer prices increased 4.2% in the 12 months through May, the largest gain since April 2023, data showed, as the Middle East conflict raised the price of gasoline and other energy products.

The pace of increase was, however, in line with forecasts, as per a Reuters poll of economists.

"The data wasn't as bad as expected, but the report is not anywhere near good. You're still seeing inflation on the rise. That's troublesome," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

The Federal Reserve is widely expected to hold interest rates at its June policy meeting. Investors are pricing in at least one 25 basis point rate hike by the end of the year.

Technology and AI stocks have borne the brunt of the selloff as investors priced in a tighter monetary policy and worried about stretched valuations in the sector.

Nvidia NVDA.O, Micron MU.O and Broadcom AVGO.O fell between 2.6% and 4.2%, extending losses after a brief rebound on Monday. The S&P 500 tech index .SPLRCT was down 1.6%.

Super Micro Computer SMCI.O tumbled 17.7% after announcing plans to raise $7 billion through a series of equity and equity-linked financing transactions to fund component purchases for its growing AI server demand.

The rotation out of highly subscribed technology shares has aided other areas of the markets that have lagged this year, including healthcare, real estate and consumer staples.

Five of 11 major S&P 500 sectors moved higher, with energy shares .SPNY leading gains, as oil prices rose more than 1%. O/R

At 11:36 a.m. ET, the Dow Jones Industrial Average .DJI fell 557.14 points, or 1.09%, to 50,318.03, the S&P 500 .SPX lost 62.10 points, or 0.84%, to 7,324.49 and the Nasdaq Composite .IXIC lost 303.56 points, or 1.18%, to 25,375.26.

U.S. President Donald Trump said Iran had taken too long to negotiate a deal and would now "have to pay the price," while Tehran said it would reassess diplomatic engagement with Washington after overnight tit-for-tat strikes.

The much-hyped $1.75 trillion listing of SpaceX SPCX.O on Friday, targeting a record $75 billion raise, could also pressure U.S. stocks as concerns mount over excessive optimism in the tech sector.

Among other movers, shares of trucking companies XPO XPO.N, J.B. Hunt JBHT.O and Old Dominion ODFL.O fell between 1.7% and 5.2% after Amazon AMZN.O announced expansion of its less-than-truckload freight services in the U.S. The industrials index .SPLRCI slid 2.4%.

Advancing issues outnumbered decliners by a 1.02-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.04-to-1 ratio on the Nasdaq.

The S&P 500 posted 20 new 52-week highs and seven new lows, while the Nasdaq Composite recorded 121 new highs and 104 new lows.