Tech-heavy Nasdaq futures fall, with Tesla shares sharply lower in premarket trading

U.S. stock futures slipped after the Labor Day holiday as investors remained jittery about recent falls in giant tech stocks.Futures tied to the S&P 500 fell 1%, suggesting that U.S. stocks will slip after the opening bell. Tech-heavy Nasdaq Composite Index futures fell 2.6% after a bout of volatility last week led to big drops in the index.In premarket trading, shares in electric-car maker Tesla fell 12.4%. Index provider S&P Global said late Friday that it wouldnt include Tesla in the S&P 500, which is tracked by billions of dollars in investments.
Shares of other major technology companies also slipped ahead of the opening bell, with Apple retreating 4.8%,
Amazon.com
declining 3.5% and
Facebook
down 4%. Chip maker
Nvidia
tumbled 5.9% and video-chat software company
Zoom Video Communications
ZM -3.00%
fell 4.4%.
I think we should start to anticipate a rotation, the momentum behind tech is going to ease, said Seema Shah, chief strategist at
Principal Global Investors.
PFG 2.12%
As were seeing easing lockdowns and the prospect of a vaccine, people are beginning to go back to a more normal way of life and reliance on tech is starting to fade from the peak where it was at the height of the lockdown.
The yield on benchmark 10-year Treasury bonds on Tuesday fell to 0.687%, from 0.720% on Friday, as some investors sought safety. The U.S. Treasury Department will issue debt with maturities ranging from 3 months to 3 years in a series of auctions on Tuesday.
Also weighing on markets Tuesday are an uptick in economic tensions between the U.S. and China.
President Trump said in a Monday press conference that he was considering decoupling from China and wasnt seeking to bring outsourced jobs back to the U.S. The comments are the latest twist in a multiyear spat between the two largest economies in the world that have centered around technology, security and jobs.
Decoupling is an economic concept not a political concept, said Sebastien Galy, a macro strategist at Nordea Asset Management. These have the potential to be very significant moves.
Chinese Foreign Minister Wang Yi announced an initiative on Tuesday seeking to set global standards on data security, in response to accusations by Washington over what the Trump administration deems to be national-security threats by Chinese companies such as Huawei Technologies and Tencent Holdings.
In Asia, major benchmarks rose, with the Shanghai Composite Index and Koreas Kospi index both closing up 0.7%. Japans Nikkei 225 ticked up 0.8% after the government released its revised gross domestic product figures for the second quarter, which were moderately better than economists expectations.
SoftBank Group
shares stabilized Tuesday, falling 0.6%, after a 7% fall on Monday. The Japanese conglomerate unsettled investors by making an outsize bet on giant tech stocks in options markets. 
The pan-continental Stoxx Europe 600 slipped 1.5% as another round of Brexit trade negotiations between the U.K. and the European Union are set to begin on Tuesday. Prime Minister Boris Johnson has set an Oct. 15 deadline to strike a deal and tensions are expected to simmer in the final weeks ahead of the deadline. The pound weakened 0.8% against the euro.
Sterling is definitely under short-term pressure, said Russell Silberston, investment strategist at Ninety One. If the range of possible outcomes suggests we are going to move toward a hard Brexit, I wouldnt be surprised to see the euro rally and the sterling fall.
The German benchmark DAX index fell 1.4%. German exports for July rose 4.7%, indicating that the trade-dependent countrys economy is recovering, albeit a little more slowly than anticipated. Economists were predicting a 5% increase.
German exports continue to play catch up with the rest of the economy, said Carsten Brzeski, chief economist for the eurozone at ING. But the German export sector is still suffering from structural challenges including trade tensions, Brexit and global supply chain disruptions as well as difficulties among its main trading partners to cope with the virus.
Oil prices extended their drop after Saudi Arabia signaled an expectation for reduced demand over the weekend by cutting prices. Global benchmark Brent crude slipped 3.7% to $40.40 a barrel. The U.S. WTI retreated 6%.
In European equities,
easyJet
fell 6.6% after the budget airline said it expects to cut flights in response to the U.K. government adding more countries to its quarantine list. British mail carrier company
Royal Mail
surged 19.4% after it said revenues were up by a third on an increase in parcel deliveries.
Investors will also be awaiting earnings releases from
Slack Technologies,
the business chat-software developer, which will report after the market closes along with athleisure brand
Lululemon Athletica.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
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