Global stocks sell-off as AI valuation concerns persist ahead of Nvidia earnings

Global equities tumbled Tuesday as concerns of inflated valuations and an uncertain macro environment grips investors ahead of Nvidia earnings this week.  

The pan-European Stoxx 600 opened in negative territory on Tuesday with mining-linked stocks and banks leading Europe’s losses. The Stoxx Europe 600 Technology Index shed 1.4%, following in the footsteps of U.S. stocks as fears of an artificial intelligence-fueled bubble persist.  

The three major U.S. indexes, Dow Jones Industrial Average, the S&P 500 and tech-heavy Nasdaq Composite, ended the previous trading session in the red. Stock futures fell again on Tuesday, setting up the market for its fourth consecutive day of losses. Nvidia, Palantir Technologies, Amazon and Microsoft were among those dipping in premarket trading.

Asia-Pacific markets were also lower on Tuesday, led by declines in Japan and South Korean benchmark indexes.

Mike Gallagher, director of research at Continuum Economics, said the market action implies equities could fall about 5% from recent highs — or “a bit more.”

He told CNBC’s “Squawk Box Europe” that the sell-off is “natural profit taking” following a strong market run since April.