NEW YORK (TheStreet) -- Stock futures were setting up for heavy declines on Tuesday on fresh fears over the health of China's economy. 

S&P 500 futures were down 2.7%, Dow Jones Industrial Average futures fell 2.6%, and Nasdaq futures slid 2.8%.

The Chinese economy looked to be in even worse shape after new data that showed its manufacturing sector contracting. China's official Purchasing Managers' Index slid to 49.7 in August, down from 50 in July, its worst reading in three years. Separately, the Caixin China manufacturing PMI fell to its lowest level since March 2009, down to 47.3 in August. China's Shanghai Composite fell more than 1%. 

Head of the International Monetary Fund, Christine Lagarde, has warned emerging economies to prepare for the slowdown in the world's second-largest economy. Lagarde also warned global growth could be weaker than the IMF's forecast two months ago. 

"As the Chinese economy is adjusting to a new growth model, growth is slowing -- but not sharply, and not unexpectedly," Lagarde said in comments while visiting Indonesia. "Other emerging economies, including Indonesia, need to be vigilant to handle potential spillovers from China's slowdown and tightening of global financial conditions."

High-momentum tech companies were selling off in premarket trading. Tesla (TSLA) - Get Report and Netflix (NFLX) - Get Report fell more than 3%, Apple (AAPL) - Get Report was down nearly 2%, and Google (GOOGL) - Get Report slid 2.3%. 

Oil prices pulled back from Monday's highs on concerns over weakening demand in China, the world's second-largest economy. The commodity had spiked more than 8% to its best close in six weeks on Monday after the EIA lowered its estimates of U.S. production and on reports the Organization of Petroleum Exporting Countries was considering cutting its own. West Texas Intermediate crude fell 3.4% to $47.52 a barrel on Tuesday morning. 

Yahoo! (YHOO) CEO Marissa Mayer is pregnant with twins girls expected in December. Mayer joined the company as chief executive in 2012 and gave birth to a boy later that year. Yahoo! is currently preparing to spin off its stake in Chinese company Alibaba (BABA) - Get Report later this year.

In earnings news, Dollar Tree (DLTR) - Get Report fell more than 6% after missing estimates on its top- and bottom-lines. The discount chain earned 67 cents a share, a penny below estimates, while revenue of $3.01 billion missed by $30 million. Gross profit margins fell 580 basis points to 28.4% on markdown expenses tied to its acquisition of Family Dollar.