1. Chinese shares plunge 6%
The Shanghai Composite tumbled 6% in volatile trade on Tuesday, with losses accelerating towards the end of the session despite fresh efforts by the government to calm the market.
China’s central bank injected the largest amount of cash into the financial system on a single-day basis in almost 19 months in an effort to offset outflows in the wake of a weaker yuan.
2. U.S. housing data in focus
Investors looked ahead to reports on the U.S housing sector at 8:30AM ET for fresh cues ahead of Wednesday’s Federal Reserve minutes.
The Commerce Department is expected to report that housing starts rose 1% in July to 1.190 million, while building permits are forecast to drop 8% to 1.232 million.
Data on Monday showed that manufacturing activity in the New York region slumped to its lowest level since November 2009 this month as new orders fell sharply.
This was offset by another report showing that U.S. house builder sentiment rose to its highest level in nearly a decade this month.
3. Wall Street earning season begins to wind down
Dow components Home Depot (NYSE:HD) and Wal-Mart (NYSE:WMT) are due to report quarterly earnings ahead of Tuesday's opening bell, while Analog Devices (NASDAQ:ADI) and La-Z-Boy (NYSE:LZB) are due after the bell.
4. Copper sinks to lowest since June 2009
Copper prices tumbled to a daily low of $2.281 a pound, a level not seen since July 2009, as steep declines on Chinese stock markets dampened appetite for the red metal.
Copper traders are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.
Worries that China’s recent devaluation of the yuan will slow down the country’s copper imports also weighed.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
5. Oil prices continue to drop
Brent oil for October delivery hit an intraday low of $48.25 a barrel, the lowest level since January 14, while U.S. oil for delivery in October fell to a session low of $41.43, the weakest level since March 2009.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.