Futures fell in Japan, Australia and China after the S&P 500 finished Monday at the lowest since Oct 2017 and the Russell 2000 Index of smaller companies entered a bear market.

The dollar dropped, while Treasuries gained. West Texas crude settled below US$50 (RM208) for the first time since Oct 2017 as glut fears grew.

Chinese assets will be closely watched as President Xi Jinping gives a speech on the nation’s reform path.

“There is panic in markets that the global economy is falling down a cliff and all growth-sensitive assets are in free-fall with US equities, oil and copper tumbling to yearly lows,” Bernd Berg, global macro and FX strategist at Woodman Asset Management, said in an email Tuesday. “All eyes are now on Fed Chair Jerome Powell with pressure on the Fed mounting to provide a lifeline to stem the global market rout.”

Investors will be scrutinising the Fed’s statement Wednesday, as well as Chairman Jerome Powell’s news conference, for clues as to its intentions for 2019.

President Donald Trump again weighed in, tweeting Monday that it was “incredible” the central bank was considering a rate hike, given low inflation and a strong dollar.

Global growth forecasts for next year are being trimmed as a trade war between the biggest economies bites and markets reel from a volatile 2018.

Meanwhile, political uncertainty still grips investors. There has been another round of personnel changes within the Trump administration, threats of a government shutdown and confusion remains over Britain’s future relationship with the European Union.