US STOCKS-Nasdaq futures tumble 2% as tech stocks get hammered

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* Tesla tumbles on being excluded from the S&P 500
* FAANG stocks fall more than 3%
* Fears over U.S. sanctions on SMIC pressure chip stocks
* Futures off: Nasdaq 2.60%, Dow 0.36%, S&P 0.96%

(Adds comment, details; updates prices)
By Medha Singh
Sept 8 (Reuters) - Nasdaq futures tumbled on Tuesday as
traders returning from a long weekend sold off shares of Tesla
and other tech heavyweights, while simmering U.S.-China tensions
and concerns over a rocky economic rebound also weighed on
sentiment.
Wall Street's tech-fueled rally halted last week with the
Nasdaq .IXIC closing 6% below its record closing high.
Investors booked profits, taking advantage of a rally that
lifted the index about 70% from its pandemic-low in March.
The Nasdaq closed Friday with its biggest weekly decline
since the height of the pandemic-linked sell-off in March, with
shares of Facebook Inc FB.O , Amazon.com Inc AMZN.O , Apple
Inc AAPL.O , Netflix Inc NFLX.O and Google-parent Alphabet
Inc GOOGL.O sliding between 1.4% and 3.7%.
The group - commonly known as "FAANG" stocks - have been
largely responsible for the rebound on Wall Street even as data
points to a faltering recovery for the domestic economy. The
companies were down between 3.1% and 4.1% in premarket trading.
Tesla Inc TSLA.O plunged 12.6% trading after the
electric-car maker was excluded from a group of companies being
added to the S&P 500. Meanwhile, media reports said SoftBank 9984.T made
significant option purchases during the run-up in U.S. stocks,
reminding investors that market makers might have billions of
dollars worth of long positions as hedges against options
trades, which will have to be sold as prices fall. "If you bought a lot of call options in the second quarter,
you're doing very well, but that creates a problem for later
when you need to unwind these positions," said Ken Peng, Citi
Private Bank's head of Asia Investment Strategy.
Peng added that the six largest U.S. technology stocks now
comprise 15% of the global market capitalization, all but
squeezing shorts out completely.
"So there's positioning hurdles to rise further, and the
loss could be unpredictable", he said.
At 7:36 a.m. ET, Nasdaq 100 e-minis NQcv1 were down 300
points, or 2.6%, Dow e-minis 1YMcv1 were down 101 points, or
0.36%, and S&P 500 e-minis EScv1 were down 32.75 points, or
0.96%.
Fears over potential U.S. sanctions against China's biggest
chipmaker SMIC 0981.HK hit domestic suppliers, with Applied
Materials AMAT.O , Lam Research LRCX.O and KLA Corp KLAC.O
dropping between 3.8% and 4.9%.
U.S. President Donald Trump and Democratic rival Joe Biden
are set to visit battleground states this week as some opinion
polls show the race tightening with less than 60 days to go
until the Nov. 3 election.