Nasdaq Tumbles 150 Points Following Micron's Warning, Market Volatility Increases

The Nasdaq index settled lower on Tuesday as weak guidance from Micron Technology Inc MU sent technology and chip stocks lower.

Investors await the release of inflation report from the US, that is expected to provide some guidance to the Federal Reserve in its monetary policy tightening efforts.

Market experts are expecting the US central bank to increase interest rates by 75 basis points during September.

Data released on Tuesday showed an increase of unit labor costs, signalling strong wage pressures. Unit labor costs climbed at a 10.8% rate in the second quarter, compared to a 12.7% growth rate in the first quarter, according to the Labor Department.

The Nasdaq 100 tumbled 1.15% to close at 13,008.16 on Tuesday. The Dow Jones and S&P 500, meanwhile, lost 0.18% and 0.42%, respectively.

Majority of the sectors on the S&P 500 closed on a lower note, with consumer discretionary and information technology stocks recording the biggest drop on Tuesday. Energy, however, was the top performing sector in the previous session, gaining around 1.8%.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) rose 2.6% to 21.77 points.

What is CBOE Volatility Index?

The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market's expectation of volatility based on S&P 500 index call and put options.