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Wall Street in the red after China's second move

U.S. stock index futures indicated another sharply lower open on Wednesday, with Dow futures down briefly more than 150 points after China moved to devalue its currency for a second day in a row.

The People's Bank of China set the yuan fixing at 6.3306 against the U.S. dollar on Wednesday, 1.6 percent weaker than the previous day's level.

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The move signaled Beijing's new commitment to set the daily fixings according to the previous day's closing spot prices and market-moves of other major currencies.

A trader works on the floor of the New York Stock Exchange.
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A trader works on the floor of the New York Stock Exchange.

The yuan extended losses, dipping to 6.42 per dollar, its weakest level in four years, fueling expectations of more sustained weakness and a feared "currency war" – where countries artificially weaken their currencies to gain a competitive advantage.

The currency jumped 1 percent towards the end of the session as China intervened in the foreign exchange markets in final minutes of trading to prevent an excessive fall in the value of the yuan, The Wall Street Journal reported Wednesday.

"The Chinese renminbi has now fallen by 3.6 percent since the end of last week against the U.S. dollar. We're not much wiser than we were about how far the Chinese authorities will let the currency fall (much closer to 7 yuan against the dollar in due course is an opening guess) but after letting it weaken again today the PBoC has been seen intervening to calm the market," said Kit Juckes, global head of foreign exchange strategy at Societe Generale.

Traders on Wednesday may be busier watching market signals than the few earnings and data on the calendar. On Tuesday, a negative technical sign appeared in the chart of the Dow, after its 50-day moving average crossed below its 200-day moving average, a bearish sign known as the "death cross".

European equities slumped after a yuan-related selloff in Asian stocks weighed on investor sentiment, with auto stocks coming under significant pressure.

French and German stocks were in the firing line again, with the CAC down 2.5 percent and the DAX falling 2.4 percent.

Oil prices ticked higher, shrugging off some weakness seen on Tuesday. Benchmark Brent futures were up 26 cents at $49.44 per barrel in morning trade. U.S. crude was near $43.32 per barrel, up 30 cents from Tuesday when it marked it lowest settlement since March 2009.

Some key data releases were also expected on Wednesday, with June JOLTS data due at 10.00 a.m. ET, followed by the July Federal Budget statement at 2.00 p.m.

Major earnings due on Wednesday included Alibaba and Macy's before market open. Cisco and News Corp are both due after the bell.

Federal Reserve policies can benefit U.S. labor markets but cannot alone solve the so-called skills mismatch between workers and employers, New York Fed President William Dudley said in prepared remarks, Reuters reported.

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Investors will also be looking to the major data release of the week, retail sales, out on Thursday.

CNBC's Patti Domm contributed to this report.