Global stock markets faced a sell-off on Tuesday, dragged down by a sharp decline in Wall Street's technology sector, with U.S. index futures falling sharply across the board.

As of 4 a.m. Eastern Time, S&P 500 futures were down 1.4%, while Nasdaq 100 futures plummeted 2.3%. Dow Jones Industrial Average futures fell 379 points, a decline of 0.7%.

During Monday's regular trading session, weakness in the tech sector pulled the S&P 500 down 0.37% for the day. The tech-heavy Nasdaq Composite Index fell 1.32%. Gains in Caterpillar's stock helped the Dow Jones Industrial Average close up 148.01 points, a gain of 0.29%.

On Monday, investors pulled funds from the group of U.S. mega-cap technology stocks: Amazon.com shares fell nearly 5%, Meta Platforms dropped 2%, and Alphabet shares slid 5%, marking their worst single-day performance in over a year. This followed the departure of two of the company's top artificial intelligence researchers to a rival, raising market concerns about a brain drain of core talent at Google.

Elon Musk's aerospace company, SpaceX, fell 16% on the day, closing lower for a third consecutive session.

The selling pressure on technology stocks continued to spread to global markets on Tuesday.

After an early surge, major Asia-Pacific stock markets all closed in the red, with South Korea's benchmark index suffering the region's steepest losses.

The KOSPI index closed down nearly 10% at 8,203.84 points. Japan's Nikkei 225 fell 3.55% to close at 69,788.38 points, ending an eight-session winning streak.

Australia's S&P/ASX 200 fell 0.33% to 8,787 points. Hong Kong's Hang Seng Index declined 1.82% to 23,336.28 points. China's CSI 300 index dropped 2.77% to 4,919.39 points.

European markets also opened sharply lower on Tuesday, with the pan-European STOXX 600 index down 1.2% in early trading.

The STOXX 600 Technology sector led the declines across Europe, falling 3.2%. Dutch semiconductor equipment maker ASML and Franco-Italian chipmaker STMicroelectronics both tumbled more than 6%, ranking among the biggest decliners on the index.

Commenting on the market sentiment, Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, noted on Monday afternoon, "Retail investors remain highly focused on AI and tech-related themes, but compared to before, enthusiasm for trading individual stocks has clearly cooled. Investors haven't lost faith in the broader tech and AI sector; they've just changed their approach. Currently, there's a greater preference for deploying capital into various exchange-traded funds rather than directly buying and selling single stocks."

Sonders added that corporate earnings remain the most fundamental support for the stock market at this stage.

Also on Monday, mediators Qatar and Pakistan issued a joint statement indicating that U.S.-Iran talks in Switzerland had made progress, with the two sides potentially reaching a final agreement within 60 days. The deal could include establishing a special coordination committee and ending military operations in Lebanon. Subsequently, the U.S. Treasury Department approved the sale of Iranian oil abroad until August, causing international oil prices to fall, trading near the day's lows.

Market participants will be watching for earnings reports from Carnival Corporation and Korn Ferry before the U.S. market opens on Tuesday, along with the preliminary June S&P Global Manufacturing and Services Purchasing Managers' Index data.