World stocks fell to a one-month low on Tuesday, as investors dumped chipmakers on concerns about ​funding of the AI boom, while rising odds of a US interest rate hike as early as this week further dampened the mood.

Asian chipmakers were at ‌the heart of Tuesday's selloff, with South Korea's KOSPI diving more than 10 percent to a three-month low, triggering a circuit breaker on the way down as it heads for its largest monthly fall on record and surpassing declines suffered during the Asian financial crisis in 1997. The index had more than tripled in value over the 12 months to June, but it has shed more ​than a third of its value since that peak.

Shares in SK Hynix and Samsung Electronics, which are under extra pressure in a market transformed ​by leverage, made losses of more than 12 percent as their stratospheric rally unwinds in a hurry.

Wall Street looked set for a weaker open as Nvidia and Micron Technology's shares fell in premarket trading. Nvidia shares had already shed 5 percent overnight after the Wall Street Journal reported the ​company was in talks to provide roughly $250 billion in financing guarantees for OpenAI as part of a massive data center project.

European stocks outperformed as positive earnings reports from Unilever ​and Mercedes-Benz helped offset losses in technology stocks.

The MSCI All Country World Price index fell 0.5 percent to its lowest since June 29.

"You've seen the companies paying for AI, the hyperscalers, not really participating because of concerns about the cost and the degree of leverage that needs to be taken on. And now we're seeing questions over the profitability of the semiconductor ​space, particularly in Asia," said Dorian Carrell, head of multi-asset income at Schroders.

"The broader AI story has some way to go, but these kinds of (profit) growth ​rates are rarely sustained. We think that it's healthy that the market's questioning these things."

Oil slides, US rate hike eyed

Brent crude futures extended Monday's nearly 9 percent plunge, falling more than 3 percent to $85.55 a barrel, as a lull in hostilities between the US and Iran followed Washington's abrupt suspension of air strikes on Saturday.

The break in fighting pushed down benchmark 10-year US Treasury yields by about 4 basis points to 4.64 percent on Monday, but hardly budged shorter-term rates.

Markets have priced about a 35 percent chance that the Federal Reserve hikes by 25 basis points on Wednesday.

"The US-Iran war, ​by propelling the price of crude oil, remains the most important determinant of what will happen to the global ​economy ... and, by extension, what ⁠informs central bank policy outlooks, at the margin," said Thierry Wizman, currency and rates strategist at Macquarie Group.

"We expect that the (Fed) this week will wish to adopt a tightening bias."

Expectations for hikes sooner or later kept the dollar supported, holding the euro below $1.14 at $1.1370. The yen traded at 163.83 to the dollar, barely above a four-decade low, with markets ​on edge about Japan intervening in the currency pair — particularly if the Bank of Japan ​leaves rates on hold this week and sets off another yen slide.

"If BOJ communication is not hawkish enough and USD/JPY heads higher, traders should anticipate an official response, including verbal intervention, rate checks, or ​even direct FX market intervention, perhaps on Friday," said Wizman.