U.S. S&P 500 futures，the world’s most liquid, tumbled as much as 2.5 percent to 4-month lows in Asian trade on Tuesday as the sell-off triggered by worries about inflation showed no sign of abating, indicating Wall Street could be set for another brutal day.
Futures fell to as low as 2,542, the weakest levels since early October, and 11.7 percent below their record peak of 2,878.5 touched on Jan. 29. S&P futures were last down 1.6 percent while Dow futures were last down 2.2 percent.
The slide added to sharp falls over the past week. The S&P 500 index and the Dow Jones Industrial Average had their biggest single-day percentage drops since August 2011 on early Tuesday (01:30 GMT), while last week, they posted their biggest weekly percentage drops since January 2016.
As the stock market fell on Tuesday, the White House said the fundamentals of the U.S. economy are strong. U.S. economic growth was running at a 2.6 annualized rate in the fourth quarter last year and the unemployment rate is at a 17-year low of 4.1 percent.
With early Tuesday’s declines, the S&P 500 erased its gains for 2018 and is now down 0.9 percent in 2018. The Dow is down 1.5 percent for the year.
Elsewhere the U.S. dollar was hovering at a four-week high against its Canadian counterpart on Tuesday, after the release of disappointing Canadian trade balance data and as sentiment on the greenback remained broadly positive.
USDCAD was up 0.09% at 1.2550, the highest since January 11.
Statistics Canada reported on Tuesday that the trade deficit widened to C$3.19 billion in December from C$2.71 billion in November, whose figure was revised from a previously estimated deficit of C$2.54 billion.
Analysts had expected the trade deficit to narrow to C$2.30 billion in December.
The commodity-related Canadian dollar was also hit by the ongoing decline in oil prices amid fresh concerns over U.S. production levels.
Meanwhile, the greenback remained supported after the U.S. Department of Labor reported on Friday that the economy added more jobs than expected in January. The report also showed that average hourly earnings increased in line with expectations last month.
The strong wage growth data fuelled inflation expectations and underlined the case for the Federal Reserve to raise interest rates at a faster pace this year.
The loonie was higher against the euro, with EURCAD at 1.5436.