Wall Street set to open lower as tech selloff bites

By Tanya Agrawal

REUTERS - Wall Street was poised for a lower open on Tuesday as a selloff in technology shares continued, while investors awaited clues on interest rate hikes from Federal Reserve Chair Janet Yellen's talk in London.

The tech sector has been under pressure over concerns about lofty valuations, with investors shifting to high-dividend paying defensive sectors such as utilities in a rising interest rate environment.

The technology index has jumped about 19 percent since the beginning of the year and has been the major force behind the S&P's record-setting rally.

"The indices continue to hover near the very high end of the recent ranges, suggesting this week's end-of-the-quarter window dressing is likely to see more sector rotation," Peter Cardillo, chief market economist at First Standard Financial, wrote in a note.

"The broadening out of the markets, we believe, is essential for the markets to escape a near-term correction."

Yellen is scheduled to take part in a discussion on global economic issues in London at 1 p.m. ET (1700 GMT). Investors expect Yellen to offer more insight into the state of the U.S. economy, which would support the Fed's forecast of a rate hike this year.

Fed officials have signaled that they would look through a slowdown in inflation and continue on their current path for hikes. But investors are skeptical and market pricing shows only a 40 percent chance of a rate hike at the Fed's December meeting.

Dow e-minis were down 13 points, or 0.06 percent, with 24,605 contracts changing hands at 8:32 a.m. ET.

S&P 500 e-minis were down 1.5 points, or 0.06 percent, with 141,601 contracts traded.

Nasdaq 100 e-minis were down 21.5 points, or 0.37 percent, on volume of 33,000 contracts.

Investors have been anxious about a recent set of weak economic data, while a steep fall in oil prices and a flattening yield curve have added to low-inflation concerns.

The U.S. Conference Board is expected to show a drop in its consumer confidence index for the month of June to 116, after slipping to 117.9 in May. The data is expected at 10 a.m. ET.

Alphabet fell 1.3 percent to $959.50 in premarket trading after EU antitrust regulators hit the tech giant with a record $2.7 billion fine.

Sprint rose 5.8 percent to $8.47 after the fourth-largest U.S. wireless service provider was said to be in talks with Charter Communications Inc and Comcast Corp about a wireless partnership. Comcast was down 1.2 percent while Charter was little changed.

T-Mobile was down 5 percent at $60 after Reuters reported that Sprint had put its merger talks with the company on hold.

General Motors slipped 0.5 percent to $34.34 after the automaker lowered its outlook for new sales in 2017. Fiat Chrysler fell 1 percent, while Ford was flat.

(Reporting by Tanya Agrawal; Editing by Anil D'Silva)