U.S. stock index futures fell after Wall Street closed lower on concerns about regional banks, while U.S.-China tensions and a prolonged government shutdown continued to weigh on investor sentiment.
The S&P 500 index fell 0.2% to 6,654.50 points, the Dow Jones fell 0.1% to 46,097.0 points, while the technology-focused Nasdaq fell 0.2% to 24,778.50 points.
Regional bank shares fell after Zions Bancorporation and Western Alliance Bancorporation reported loan losses due to potential fraud, reigniting concerns about credit oversight among small lenders.
Zions said it would take a loss of about $50 million after revealing “misrepresentations and breaches of contract” in commercial loans through its California Bank & Trust unit.
Western Alliance said it was taking legal action against borrowers over suspected fake collateral.
Zions shares fell more than 13%, while Western Alliance fell nearly 10%, causing the KBW Regional Banking Index to fall about 6%.
In other developments, the US government shutdown, now in its third week, continued to weigh on market sentiment, disrupting economic data releases and raising concerns about near-term growth.
Investors remained wary of escalating US-China tensions after President Donald Trump announced an additional 100% tariff on all Chinese imports starting next month in response to Beijing's rare earth restrictions.
Meanwhile, optimism in the chip sector after positive results from Taiwan Semiconductor Manufacturing Co (TSMC) lifted major technology stocks in early trading, but weakness in the industrial and financial sectors offset the gains.
JB Hunt shares rose more than 20% after the company reported strong quarterly results.
Pharmaceutical companies Eli Lilly and Novo Nordisk also fell after Trump suggested a big price cut for their obesity drugs.
