TOKYO, May 10 (Reuters) - Japan's Nikkei share average fell for a second day on Tuesday, following a selloff on Wall Street overnight as investors worried about aggressive policy tightening by the Federal Reserve.

The Nikkei dropped to as low as 25,773.83 points for the first time since mid-March, but clawed back about half of its early losses to end the morning session 0.93% lower at 26,074.53, retaking the psychological 26,000 mark.

The broader Topix slid 0.94% to 1,860.71.

"From a technical perspective, we've come to a good spot, and the market is contemplating the potential for a rebound in U.S. stocks, which has limited the decline in Japanese shares," said a market participant at a domestic securities firm.

"There's also starting to be some concern that stocks have been oversold."

Japanese tech stocks tracked declines in Wall Street peers overnight. Chip giant Tokyo Electron was the biggest drag, contributing 35.5 points to the Nikkei's decline with its 1.86% slide. Startup investor SoftBank Group axed another 34 points from the index, dropping 3.25%.

Sony Group, scheduled to report results later in the day, dropped 3.64%. Nintendo, which also reports results on Tuesday, was largely flat. Toyota Motor lost 2.09%, with financial results scheduled for Wednesday.

Travel stocks slipped again, with tour agency H.I.S. shedding 4.6% and Japan Airlines falling 3.38%.

Japan Steel Works was the Nikkei's biggest loser by far for a second day, plunging 14%, after revealing at the start of the week that a subsidiary had falsified product data going back to at least 1998.

Similar to Monday, utilities were the only Nikkei subsector to advance.

Of the benchmark index's 225 component stocks, 153 fell versus while 70 rose and two remained unchanged. (Reporting by Tokyo markets team; Editing by Vinay Dwivedi)