Asian markets were set for losses in early Tuesday trade, tracking sharp declines seen stateside on the back of fresh developments in an escalating trade dispute between the U.S. and China.

Futures pointed to lower opens for both Japan and Australia markets: Nikkei futures traded in Japan were down 0.57 percent compared to the index’s previous close. Australian SPI futures, meanwhile, were lower by 0.91 percent at the end of Monday.

U.S. stocks tumbled following weekend news that U.S. President Donald Trump intends to block some Chinese companies from investing in U.S. technology. Treasury Secretary Steven Mnuchin said the investment restrictions, reported by the Wall Street Journal, were “false, fake news,” but said that the measures would apply to “all countries” instead of just China.

There were conflicting messages, however, from the Trump administration, with White House economic advisor Peter Navarro telling CNBC that there were “no plans” to impose restrictions targeting foreign investments. Stocks stateside pared some losses following Navarro’s comments.

The Dow Jones industrial average fell 1.33 percent, or 328.09 points, to close at 24,252.80. The index also ended the session below its 200-day moving average, a key technical level, for the first time since June 2016.

Other major U.S. indexes also finished lower on the first trading day of the week. The S&P 500 lost 1.37 percent to end at 2,717.07 and the Nasdaq composite lost 2.09 percent to finish the day at 7,532.01.

European markets were weaker overnight on the back of investor concerns about trade tensions, with the pan-European Stoxx 600 closing lower by more than 2 percent. Automaker stocks there took a hit after Trump last week threatened new duties on European autos.

The intensification in trade tensions between the U.S. and its trading partners this year has kept investors on edge. Markets are concerned that a trade war could negatively affect global economic growth.

In currencies, the dollar was broadly weaker against a basket of currencies, with the dollar index at 94.276 at the end of the last session. The greenback was also softer against the safe-haven yen, trading at 109.67 at 7:02 a.m. HK/SIN.

The euro, meanwhile, firmed above the $1.17 handle and last traded at $1.1702.

On the energy front, oil prices fell on Monday after OPEC said last week that it would increase oil production. U.S. West Texas Intermediate crude settled lower by 50 cents at $68.08 per barrel and Brent crude futures lost 82 cents to settle at $74.73.

— CNBC’s Fred Imbert contributed to this report.