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Wall St. under pressure after China weakens currency

U.S. stock index futures indicated a sharply lower open on Tuesday after the People's Bank of China allowed the yuan to depreciate almost 2 percent against the U.S. dollar, pushing the currency to suffer its biggest fall in over two decades.

The central bank's surprising move, which it described as a "one-off depreciation" moved the renminbi's daily peg against the dollar from 6.2298 renminbi against the U.S. dollar, down from 6.1162 on Monday.

Read MorePBOC sharply cuts yuan against US dollar after weak data

Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters
Traders work on the floor of the New York Stock Exchange.

The move sent shock waves through currency markets, with analysts seeing the move as the latest aggressive step in the so-called global currency wars.

European stocks traded lower, with the French CAC and the German DAX both down 1 percent after the news.

Markets will also be digesting the unexpected news from Google which announced after the close Monday that it will become part of a new publicly traded entity called Alphabet. Shares will still trade under the tickers GOOGL and GOOG. Both classes of the stock jumped more than 6 percent in after-hours trade.

On the data front, preliminary unit labor costs figures for the second quarter at 8:30 a.m. ET and wholesale trade data is due at 10:00 a.m. ET

Earnings from Towers Watson and Red Robin Gourmet Burgers are due before market open. Computer Sciences, Symantec, Cree and Cyber Ark Software will report after the bell.

Oil will likely remain a major factor for markets after dollar weakness and a refinery outage helped crude rally nearly 2.5 percent from a near five-month low early Monday. Brent crude was down 34 cents at $50.08 in London trading, while U.S. crude fell 33 cents to trade at $44.63.

Back in Europe, Greece and its lenders, who have been negotiating the finer details of the country's third bailout package, have reached a deal on the country's final fiscal targets, a Greek Finance Ministry official told CNBC.

"The negotiations were completed this morning, there are some minor details left but it's nothing special. These details do not affect the completion of the deal," the official said on Tuesday. Greek shares outperformed the rest of Europe, gaining close to 2 percent.