By Avantika Chilkoti 

Global stocks dropped Monday, resuming last week's slump on concerns around global trade tensions and fresh uncertainty over a Brexit deal.

The Stoxx Europe 600 was down 0.4%. In Asia, Japan's Nikkei Stock Average dropped 1.9% while Hong Kong's Hang Seng was down 1.2%.

In the U.S., futures pointed to a 0.4% opening drop for the S&P 500 and the Dow Jones Industrial Average.

Last week, several global equity indexes recorded their worst performances since February's rout as a steep spike in bond yields sparked a selloff in stocks. Investors grew increasingly jittery over U.S. growth and the prospect of further tightening from the Federal Reserve.

Though markets seemed to find their footing Friday, the downbeat trading continued Monday.

"I'm starting to seriously worry that markets may trigger an economic downturn earlier than widely expected, driving a self-fulfilling market adjustment toward more normal (long-term) valuations," said Erik F. Nielsen, group chief economist at UniCredit Bank, in a note to clients. "There is little chance global policy makers will come to the rescue in time."

In Europe, the risk-off tone was being driven by uncertainty around a Brexit deal. The negotiations around the U.K.'s impending departure from the European Union suffered a fresh setback Sunday, with the two sides failing to find a compromise on the issue of the Irish border.

"A no-deal Brexit is likely to further curb growth expectations and therefore the attractiveness of the U.K.," said Louise Dudley, global equities portfolio manager at Hermes Investment Management, who is underweight U.K. equities from a European or global context. "Broadly our expectation is that we are likely to see higher costs for businesses."

The British pound was down 0.3% against the U.S. dollar.

Meanwhile, the U.S. earnings season was getting into full swing and investors were training their eyes on retail sales data due Monday.

The 10-year U.S. Treasury yield ticked up slightly to 3.154%, compared with 3.140% Friday. Yields move inversely to prices.

The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was down 0.1%.

In commodities, gold was up 0.6%. Brent crude, the global oil price benchmark, was up 0.6% as tensions between the U.S. and Saudi Arabia mounted over the suspected killing of a dissident Saudi journalist in Istanbul.

(END) Dow Jones Newswires

October 15, 2018 06:26 ET (10:26 GMT)