NEW YORK (CNNMoney.com) -- European and Asian shares dived Tuesday amid ongoing debt worries and concerns about tensions between North and South Korea.
In afternoon European trading, France's CAC 40 tumbled 3.1%. The FTSE 100 in Britain sank 2.5% and Germany's DAX lost 2.6%.
Ongoing concerns about the health of Spain's banking sector weighed on shares in Europe and triggered a drop in the euro against major currencies.
Against the dollar, the euro fell to $1.2227 from $1.2404 late Monday.
U.S. futures, which offer an indication of how markets may open when trading begins in New York, also fell sharply.
At 8:20 a.m. ET, Dow Jones industrial average, S&P 500 and Nasdaq futures were all down about 2%.
The slump in Europe came on the heels of a big drop in Asia.
The Hang Seng in Hong Kong finished Tuesday's session 3.4% lower. The Nikkei plunged 3.1% and the Shanghai Composite lost 1.9%.
Asian markets were rattled amid growing tensions in Korea. North Korea threatened military action against South Korea on Tuesday after accusing the South Korean navy of trespassing into its waters, the Yonhap news agency said
Tension has been rising since Monday, when South Korea said that North Korea was behind the sinking of one of its warships in March.
The United States said it would conduct joint military exercises with the South Korean military in response.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.80%||3.88%|
|15 yr fixed||3.20%||3.23%|
|30 yr refi||3.82%||3.93%|
|15 yr refi||3.20%||3.23%|
Today's featured rates:
Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More
Honda and General Motors are creating a new generation of fully autonomous vehicles. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Whether you hedge inflation or look for a return that outpaces inflation, here's how to prepare. More