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Chip Sell-Off Cramps Wall Street Pre-Bell; Asia Down, Europe Up

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Wall Street futures pointed mostly lower pre-bell Tuesday, as traders again weighed rich semiconductor- and AI-industry valuations against concerns regarding heavy capital spending and possible new China-based competition.

In the futures, the S&P 500 fell 0.2%, the Nasdaq declined 0.9%, although the venerable Dow Jones was up 0.2%.

The VanEck Semiconductor fund (SMH), after trading down 2.3% on Monday, fell another 2.9% in pre-bell trading.

Asian exchanges traded sharply lower overnight, with Japan's Nikkei 225 closing down 4% and Seoul's KOSPI Index declining by 10.8%, as semiconductor shares tumbled.

Additionally, tech investors were rattled by media reports that China-based Shanghai Yuliangsheng has begun producing deep-ultraviolet lithography equipment, a chipmaking technology now dominated by the Dutch enterprise ASML.

In pre-bell action, ASML shares traded down 4.6%, after a 5.8% loss on Monday.

Investors also note the start of the two-day Federal Reserve policy session, which concludes on Wednesday in Washington. However, the market expects the US central bank to hold steady on rates.

European bourses tracked moderately north at midday on the continent.

Also on the economic calendar are the international trade in goods, retail inventories and wholesale inventories bulletins, all for June, at 8:30 am ET.

The Case-Shiller Home Price Index and FHFA House Price Index, both for May, log at 9 am.

The Conference Board Consumer Confidence Index and the Richmond Fed Manufacturing Index, both for July, post at 10 am.

In pre-market action, Bitcoin traded at $63,259, West Texas Intermediate crude oil traded down 1.7% at $81.21, and 10-year US Treasuries offered 4.62%. Spot gold commanded $4,024 an ounce.

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