Stocks and futures for the United States fell after Wall Street ended with another decline last week.
Many markets in Asia were closed for holidays and analysts said the thin trading accentuated volatility. In Hong Kong, shares dropped more than 2% in Paris and Frankfurt, while the benchmark in Paris fell 3.3%.
Investors are watching to see whether the Federal Reserve will take any action to address the effects of rising prices on businesses and consumers.
Worries are mounting about the U.S. debt ceiling, also. House Democrats said Friday they planned to move this week to suspend the cap on government borrowing authority, and the White House ratcheted up pressure on Republicans by warning state and local governments that severe cuts lie ahead if the measure fails in the Senate.
DAX fell 2.1% to 25,163 on Tuesday. 26 and the CAC 40 in Paris shed 2.3% to 6,419. The FTSE 500 lost 1.4% to 6,866. The future of the Dow industrials rose 0.3% while the contract for the S&P 500 fell 1.3%.
The yield on the 10 year Treasury note fell to 1.34% from 1.38% on Friday.
Heavyweight Chinese property companies and banks lost ground on persistent concerns about the potential ripple effects of Hong Kong developers Evergrande.
The company was expected to fail in mortgage payments, as ratings companies forecast it could default on its debts. Its shares fell 10.6% on Monday.
Henderson Land Development lost 13% and New World Development lost 12% amid reports that China would tighten oversight over the property sector in Hong Kong.
The Hang Seng - Bar, found out in Hong Kong, was dropping 821 points to 24,099. Australia's S&P ASX 200 lost 2% to 7,248. Markets were closed in mainland China, South Korea, Japan, Taiwan and Malaysia.
Asia is off to a nervous start today with liquidity seriously thinned by holidays, Jeffrey Halley of Oanda wrote in a commentary. The list of circling sharks is long, starting with increasing noise from the U.S. over the debt ceiling. The Fed is expected to release its latest economic and interest rate policy update on Wednesday. The central bank has said higher costs for raw materials and consumer goods are also likely to be temporary as the economy recovers, but analysts worry that higher prices could stick around and dent companies bottom lines while also crimping spending.
Wall Street ended on a feeble note last week, with the S&P 500 index losing 0.9% to 4,432. It was 99, its second straight loss in the week.
The Dow Jones Industrial Average fell 0.5% to 34,584. 88, and the Nasdaq fell to 15,043 down 0.9% to 15,071 notes. The Russell 2000 index of smaller companies recovered from an early slide, rising 2.2% to 2,236. In other trade on Monday, U.S. benchmark crude oil lost 92 cents to $71.06 per barrel in electronic trading on the New York Mercantile Exchange. On Friday, it gave up 64 cents to $71.97 per barrel.
Brent crude, the standard for international pricing, lost 77 cents to $74.57 per barrel.
The Japanese dollar declined to 109.74 Japanese yen from 109.95 yen. The euro fell to $2.1711 from $1.1731.