Stocks are lower at the market open Tuesday as Chinese markets plummeted.
As of 10:22 a.m. ET, the Dow Jones industrial average, S&P 500 and Nasdaq composite are each down about 1%.
In Asia, Tokyo’s Nikkei 225 index dropped 0.7%. Hong Kong’s Hang Seng index and mainland China’s Shanghai composite index saw steep declines, 2.5% and 5.4% respectively.
The plunge in Chinese stocks comes as the Chinese government set new restrictions on collateral for short-term collateralized loans, called repurchase agreements. By limiting the types of bonds that can be used as collateral, the government made those loans more difficult to get, and more expensive.
The Chinese government also extolled the virtue of slower economic growth, a signal that it expects the economy to grow less quickly in the future.
“Debt to GDP in China has seen a massive increase as the Chinese central government has internalized on its books the problems that occurred in the private sector,” Rupal Bhansali, chief investment officer of international equities at Ariel Investments, said at USA TODAY’s 19th annual Investment Roundtable on Friday.
Exchange-traded funds that invest in China tumbled in premarket trading. For example, iShares FTSE China 25 Index Fund (ticker: FXI) fell 3.14%. Traditional open-ended funds won’t price until the U.S. market closes at 4:00 p.m.