Stocks slide after the IMF cut its forecast for global growth amid mounting concerns about the US-China trade war

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trader worried nervous hands on headMichael Culhane, a trader in the S&P 500 stock index futures pit at the Chicago Board of Trade, watches price movement October 10, 2008 in Chicago, Illinois.Scott Olson/Getty

Stocks around the world are sliding Tuesday after a gloomy global growth outlook from the International Monetary Fund (IMF) gave investors another thing to worry about.

On Monday, the IMF released its latest forecasts for global GDP growth in the coming two years, and lowered both estimates from previous forecasts. Growth in 2019, the fund said, will be 3.5% globally, while next year it will come in at 3.6%. These figures, released on the eve of the World Economic Forum in Davos, Switzerland, compare to 3.7% and 3.8% respectively at the last release.

To be sure, such revisions are not enormous, but they marked the second consecutive downgrade to growth expectations from the IMF. Hussein Sayed, chief market strategist at FXTM, noted in an email Tuesday morning that further downward revisions to growth expectations could be on their way in the near future.

"This was the second downturn revision in three months, and we can still see further downgrades in near future if trade tensions escalate, the UK exits with a no-deal from the EU, or China's economic growth drops more sharply," he said in an email.

Read more: A data point known as a canary in the coal mine for the global economy just fell off a cliff, and it's a troubling sign of how bad things are in China

Alongside falling growth expectations for the world economy, investors remain uncertain about progress regarding the trade war between the US and China. Talks are scheduled for the end of the month, but in the interim, it was reported by Bloomberg Monday that little progress is being made on one of the key issues of the trade war: intellectual property.

The two issues have combined to subdue stocks, with major indexes in Asia and Europe falling, and US stocks expected to drop at the open later Tuesday. Here's how things look just before 9.00 a.m. GMT (4.00 a.m. ET):

  • After a rally driven by hopes of fresh economic stimulus on Monday, Chinese stocks slid during Tuesday trade with the country's main share indexes all seeing losses in excess of 1% on the day. The benchmark Shanghai Composite was off by 1.2%, while the China A50 dropped 1.3%. Hong Kong's Hang Seng lost 0.7%.
  • European stocks are losing ground during morning trade, with most indexes off roughly 0.2%. The Euro Stoxx 50 broad index lost 0.21%.
  • US stocks reopen Tuesday after a break to observe Martin Luther King Day on Monday, and futures point to losses for all three key indexes. The tech-heavy Nasdaq is set to drop 0.7% at the open. Meanwhile, the S&P 500 and Dow Jones are set for falls of roughly 0.5%.
  • Away from stocks, oil prices have dropped, likely also reflecting the IMF's pessimistic growth outlook. Brent crude, the international benchmark, is down 1% to $62.11 per barrel, while West Texas Intermediate is 0.91% lower at $53.55.
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