Moody's downgrade of US banks Stocks sank on Tuesday, set to open in the red after surprisingly weak Chinese trade data and a warning about US bank health sent shivers through markets.
Futures on the Dow Jones Industrial Average (^DJI) fell about 0.5%, or 180 points. Meanwhile, those on the S&P 500 (^GSPC) and the tech-heavy Nasdaq 100 were both down around 0.5%.
Optimism for a global economic recovery that could lift stocks took a hit Tuesday, after data showed a slump in Chinese imports and exports in July that was far worse than expected. The grim numbers signal that demand is still faltering, dimming the prospects for a rebound in the world's second-biggest economy.
Also dampening spirits was a Moody's downgrade of 10 small and midsize US banks, which came with a warning it could lower credit ratings for some of the nation's biggest lenders. It flagged risks in their commercial real estate portfolios, a potential signs of stress in the sector that has been closely watched since the banking crisis earlier this year.