Stock index futures pointed to further steep losses for equities on Tuesday, after the previous session's plunge, as investors worry the world's largest economy could fall back into recession.

Futures for the S&P 500, the Dow Jones and the Nasdaq 100 were down 1.0 to 1.2 percent, a day after the S&P index sank 6.7 percent to 1,119.46 points on heavy volume after Standard & Poor's cut the U.S. triple-A credit rating.

Global markets are in free fall because of fears about the ability of U.S. and European leaders to address the problems of rising debt and slowing growth.

Recent action by the European Central Bank to buy Italian and Spanish bonds has done little to ease those worries.

But a meeting of the Federal Open Market Committee to discuss interest rates later on Tuesday may help, though the Fed is expected to keep interest rates unchanged.

Speculation is growing that Chairman Ben Bernanke may do more to help restore confidence with possibly another round of asset purchases, said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, in Brussels.

He said the current environment reflected a combination of markdowns to the global economic outlook, along with the uncomfortable realization that global policy makers may have their hands tied in terms of providing further support.

The market will also focus on a raft of economic numbers for further hints about the health of the economy. ICSC/Goldman Sachs will release chain store sales at 7:45 a.m. EDT, while preliminary Q2 Productivity and Unit Labor Costs numbers are due at 8:30 a.m. EDT. Redbook will release at 8:55 a.m. EDT its Retail Sales Index of department and chain store sales for August.

The figures will be closely scrutinized after higher-than-expected inflation data from China on Tuesday that has added to investors concerns.

World stocks, which have fallen 20 percent since early May, sank for a 10th session in a row on Tuesday as mounting fears over the health of the global economy prompted investors to dump riskier assets across the board.

Investors rushed to safe-haven assets, with the Swiss franc hovering near all-time highs and gold prices hitting another record high.

Charts showed more misery for investors.

Analysts said the S&P 500 index was now more technically oversold than at any other time over the last ten years. Its 14-day relative strength index (RSI) was at 16.5 percent. Generally a level below 20 attracts buyers, but the current market conditions have scared investors.

Despite the very low readings on various momentum oscillators, there is still not enough evidence in place to suggest that even a short-term bottom is close to forming, said Bill McNamara, technical analyst at Charles Stanley.

I still suspect that we will see a retreat to last summer's lows at around 1,010 before a lasting bottom has formed, he added.

(Editing by Sophie Walker)

China Ben Bernanke