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Wall Street set to open lower as commodity prices slide

Traders work on the floor of the New York Stock Exchange in New York August 26, 2015. REUTERS/Lucas Jackson

By Tanya Agrawal

(Reuters) - Wall Street was set to open sharply lower on Tuesday due to a fall in oil and copper prices on concerns about the outlook for the Chinese economy.

Copper prices hit two-week lows, while oil was down about 2 percent. The Chinese government's efforts to stimulate growth by easing fiscal and monetary policy have failed to calm nerves.

U.S. stocks ended higher on Monday, rebounding from losses late last week with help from Apple and financial shares, but a drop in biotech shares limited the advance.

However, trading remains volatile as investors try to gauge when the Federal Reserve will raise interest rates.

The Fed last week kept rates at near-zero levels, citing the turbulence in a tightly linked global economy, including slowing growth in China.

Atlanta Fed President Dennis Lockhart said on Monday a rate hike later this year was still possible.

"The market is fragile as it is," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "The volatility will continue until we get some clarity from the Fed and China."

S&P 500 e-minis were down 34.25 points, or 1.74 percent, with 336,060 contracts traded by 8:38 a.m. ET (1238 GMT).

Nasdaq 100 e-minis were down 88 points, or 2.03 percent, on volume of 60,672 contracts. Dow e-minis were down 275 points, or 1.67 percent, with 48,245 contracts changing hands.

The dollar hit an almost two-week high against a basket of currencies on Tuesday after comments from Fed officials revived expectations that rates could still be hiked later this year.

Lockhart, a voting member of the Federal Open Market Committee, is scheduled to speak again later in the day.

Chair Janet Yellen speaks on Thursday.

Shares of Goldman Sachs were down 1.5 percent at $180.50 premarket as Chief Executive Lloyd Blankfein said he had a "highly curable" form of lymphoma.

Bank of America was down 1.5 percent at $15.46 ahead of a shareholder vote on separating its chief executive and chairman roles.

Gold and copper miner Freeport McMoRan was down 4.9 percent at $10.01.

Biotech companies were down for a second day after U.S. Democratic presidential candidate Hillary Clinton said she would announce a plan to stop "price gouging" for specialty drugs. Gilead fell 1.7 percent and Biogen fell 1.4 percent.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D'Souza)