Wall Street was headed for a second straight session of declines on Tuesday as an escalation in U.S.-China tensions tempered expectations from the high-level trade talks this week, while Boeing was hit by fresh concerns over its grounded 737 MAX jets.
The U.S. government on Monday widened its trade blacklist to include Chinese video surveillance firm Hikvision and surveillance equipment maker Zhejiang Dahua Technology among others, drawing a sharp rebuke from Beijing.
Read more: China refutes U.S. entities blacklist over so-called abuse in Xinjiang
Souring the mood further was a South China Morning Post report that said China had toned down its expectations ahead of the talks and that the Chinese delegation could depart Washington a day earlier than planned.
The U.S. action pressured suppliers to the Chinese firms. Intel Corp and Nvidia Corp fell about 1 percent in premarket trading, while Ambarella Inc slumped 10 percent.
Dow.DJI heavyweight Boeing Cofell 1.5 percent after the Wall Street Journal reported friction between the United States and Europe could further delay efforts to resume flights of the planemaker's best-selling 737 MAX jets, which have been grounded since early 2019.
The three main indexes logged their first fall in three sessions on Monday as investors tackled mixed headlines on U.S.-China trade. Risk appetite has also been hit by weak economic indicators last week and intensifying efforts to impeach President Donald Trump.
At 7:10 a.m. ET, Dow e-minis 1YMcv1 were down 192 points, or 0.73 percent. S&P 500 e-minis EScv1 were down 20 points, or 0.68 percent, and Nasdaq 100 e-minis NQcv1 were down 55.25 points, or 0.71 percent.
The benchmark S&P 500 index .SPX is now about three percent off its record high hit in July.
Market participants will now turn their attention to the third-quarter earnings season beginning next week for evidence of the impact of the trade war on corporate America.
Analysts expect the worst quarterly profit performance since 2016, with earnings from S&P 500 companies declining nearly three percent from a year earlier, based on IBES data from Refinitiv.
Among other stocks, Nektar Therapeutics slid 7.1 percent after Goldman Sachs downgraded the drug developer's stock to "sell."
U.S.-listed Chinese stocks also declined, with Alibaba Group Holding , JD.com Inc and Baidu Inc down between 1.6 percent and three percent.
On the data front, the Labor Department will release its report on producer price index (PPI), at 8:30 a.m. ET, which is expected to have remained at 0.1 percent last month.