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US STOCKS-Nasdaq futures tumble over 1% as surging bond yields hammer tech shares

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(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.)

* Mega-cap tech names decline in premarket trading

* Futures down: Dow 0.38%, S&P 0.78%, Nasdaq 1.45% (Adds comment, details; updates prices)

By Devik Jain and Sruthi Shankar

Sept 28 (Reuters) - Nasdaq futures fell more than 1% on Tuesday as technology heavyweights came under pressure from a surge in bond yields on expectations of higher interest rates and rising inflation.

The two-year U.S. Treasury yield surged to 18-month highs, weighing on shares of high-growth companies whose values are closely linked to future earnings.

Shares of Google-parent Alphabet Inc, Microsoft Corp, Amazon.com Inc, Apple, Tesla Inc and Facebook Inc dropped about 1.5% in premarket trading. These stocks have benefited from the low-interest rate environment since the start of the pandemic.

The Nasdaq Composite index and the S&P 500 index fell on Monday, while the blue-chip Dow outperformed as investors pivoted into sectors that stand to gain the most from an economic revival.

The S&P energy sector has gained nearly 10.4% so far in September, and is on track to break a two-month losing streak.

"The problem now is because of the inflationary pressure that we've got and potential slowing in growth, I don't think you get that cyclical uplift to compensate for the tech pullback," said Neil Wilson, chief market analyst at Markets.com.

"Fundamentally, the market is working out that it needs to reprice because of the Federal Reserve."

The higher prices and hiring difficulties seen as the U.S. economy reopens from the pandemic could prove "more enduring than anticipated," Fed Chair Jerome Powell said in prepared remarks ahead of his hearing before the U.S. Senate Banking Committee.

A host of other Fed officials including St. Louis Fed President James Bullard, Fed Bank of Chicago President Charles Evans and Fed Bank of Atlanta President Raphael Bostic are also slated to speak later in the day at separate events.

Market participants are waiting for data on consumer confidence, inflation and ISM manufacturing activity this week to gauge the pace of recovery.

Progress on U.S government funding negotiations and a vote on President Joe Biden's $1 trillion infrastructure bill are also in focus.

The shift out of technology names was triggered after the Fed last week signaled it could tighten its accommodative monetary policies in the months ahead amid signs of recovery in the world's largest economy.

After largely underperforming its growth counterpart so far this year, the Russell 1000 value index has narrowed the gap in September, and is now up 17.3%.

At 7:04 a.m. ET, Dow e-minis were down 131 points, or 0.38%, S&P 500 e-minis were down 34.75 points, or 0.78%, and Nasdaq 100 e-minis were down 221 points, or 1.45%.

Ford Motor Co rose 4.3% after the U.S. automaker and its Korean battery partner SK Innovation said they would invest $11.4 billion to build an electric F-150 assembly plant and three battery plants in the United States. (Reporting by Sruthi Shankar, Medha Singh and Devik Jain in Bengaluru; Editing by Subhranshu Sahu and Sriraj Kalluvila)

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