U.S. stock index futures tumbled about 2 percent on Tuesday as Japan faced a looming nuclear crisis, sending global equities sharply lower in what could be a prolonged bout of turmoil for financial markets.

Japanese stocks slid 10.6 percent, posting the worst two-day losing streak since 1987. European stocks dropped 3.1 percent Tuesday morning, led by shares of nuclear-related utilities, luxury groups and assurance companies.

S&P 500 futures lost 32.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures plummeted 255 points, and Nasdaq 100 futures dropped 63.75 points.

U.S. shares seen as exposed to the disaster as well as economically sensitive stocks plunged. Insurer American International Group Inc fell 8 percent, General Electric Co dropped 6 percent, and aluminum producer Alcoa Inc lost 4 percent.

In order to avoid unsettling markets even further, the U.S. Federal Reserve was now more likely to leave its monetary policy statement unchanged later Tuesday, said Peter Cardillo, chief market economist at Avalon Partners.

Before this tragedy there was an outside chance that the Fed was going to be a bit more hawkish due to increasing oil prices and due to the growing inflationary concerns, he said.

A Japanese nuclear power plant sent low levels of radiation floating toward Tokyo, prompting people to flee the capital and others to stock up on essential supplies.

Investors scrambled to assess the fallout from the crisis. Texas Instruments Inc warned on Monday of lost revenue from two semiconductor plants in Japan following the country's biggest-ever earthquake.

In light of what could be the worst nuclear crisis since the Chernobyl disaster in 1986, investors were questioning the nuclear industry's growth prospects. The Global X Uranium exchange traded fund fell 7.4 percent.

Japanese shares traded in New York also slumped. Canon Inc fell 7.2 percent, while Sony Corp dropped 11 percent. The ISHR MSCI Japan exchange traded fund lost 7.5 percent.

Exchanges enforced short-sale restrictions against many Japan and nuclear industry related exchange traded funds, such as the Market Vectors uranium and nuclear energy fund and the ProShares Ultra MSCI Japan fund.

Oil and other commodity prices fell as investors feared Japan's crisis would hit global growth. Brent crude dropped 4.6 percent to near $108 per barrel, while U.S. crude slid 4 percent to near $97. London copper fell more than 1 percent.

Adding to market jitters, on Monday Saudi Arabia sent troops into Bahrain, home to the U.S. Navy's Fifth Fleet, to protect government facilities after weeks of protests by the Shi'ite Muslim majority.

(Editing by Jeffrey Benkoe)

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