Investors stateside were also waiting for the latest readings on the manufacturing and construction sectors.
Futures for the Dow Jones Industrial Average YMH6, -1.95% slumped 322 points, or 1.9%, to 17,022, while those for the S&P 500 index ESH6, -1.85% lost 36 points, or 1.9%, to 1,999. Futures for the Nasdaq 100 index NQH6, -2.25% dropped 100 points, or 2.2%, to 4,488.
Among individual stocks, shares of Tesla Motors Inc. TSLA, +0.81% dropped 4.5% premarket after the electric car maker released delivery numbers for the fourth quarter on Sunday.
China slump: The sharp losses followed an almost 7% slide in China’s Shanghai Composite Index SHCOMP, -6.86% on the back of a weak manufacturing reading. The slide activated a new circuit-breaker system for Chinese stocks, halting trading on the mainland for the rest of the day. European stocks also slumped.
“The rout in China is placing pressure on markets more globally, although it remains to be seen how long the hit to market sentiment will persist,” said economists at Investec in a note.
Last summer, a severe selloff in China’s stock market sparked a global market rout, which was seen as one of the reasons the U.S. Federal Reserve kept rates on hold at its September meeting.
Chinese officials announced plans for the circuit breaker system in December, as a measure to prevent the wild swings that accelerated this summer’s stock-market crash. But analysts and investors say the circuit breaker could trigger more selling, as the freeze spooks investors and losses snowball, setting off the halt all over again.
U.S. stocks ended 2015 mostly lower after a losing session on Thursday. Markets were closed Friday for New Year’s Day.
Read more at MarketWatch.