U.S. Markets Overview: Treasurys chart

At around 04:15 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.6369%, while the yield on the 30-year Treasury bond was also lower at around 2.1124%.

Market focus is largely attuned to selling in regional markets, after protesters forced Hong Kong’s main airport to cancel all flights on Monday.

The protests, which first started in June to rally against an extradition bill to mainland China, have morphed into a democracy movement.

Meanwhile, a possible return to interventionist policies in Buenos Aires roiled the Argentine market in the previous session. It came after President Mauricio Macri, the business friendly center-right incumbent, lost by a far bigger margin than expected in presidential primaries.

Alongside worries about the prospect of a drawn-out U.S.-China trade war, these fears drove investors away from riskier assets.

Safe-haven harbors — such as bonds, gold and the Japanese yen — are typically sought to limit one’s exposure to losses in the event of a sharp market downturn.

The traditionally watched two-year and 10-year Treasury spread appears poised to invert any day now, with the curve at its flattest level since 2007. On Tuesday, the spread between two-year and 10-year Treasury yields narrowed to less than 6 basis points.

An inverted curve simply means a shorter-term interest rate is higher than the longer-term one that it is being compared too, and that inversion has been a reliable recession signal.

On the data front, the latest NFIB small business optimism survey for July will be released at 6:00 a.m. ET. An annualized and monthly Consumer Price Index (CPI) and core CPI data for July will be released slightly later in the session.

Meanwhile, the U.S. Treasury is set to auction $28 billion in 52-week bills on Tuesday.

— CNBC’s Patti Domm contributed to this report.