Asia-Pacific markets were set to open lower on Friday with Japan's Nikkei 225 futures pointing to a near 4% plunge for the index, extending losses from Thursday, after Wall Street sell-off overnight.

Japan's Nikkei 225 futures in Chicago stood at 36,685, while their counterpart in Osaka was at 36,710 compared to the previous close of 38,126.33.

At this level, the gap between the Chicago futures and the Nikkei last close is about 3.75%, indicating the Nikkei could hit its lowest level since Feb. 7, when it closed at 36,119.92.

Other indexes in the region also look set to fall, with Australia's S&P/ASX 200 futures at 7,925, compared with its all-time high close of 8,114.7.

Hong Kong's Hang Seng index futures were at 17,047, lower than the HSI's last close of 17,304.96.

Separately, South Korea's inflation numbers for July came in slightly higher than expected, with the country's consumer price index climbing 2.6% year on year, compared to the 2.5% expected by economists polled by Reuters.

The gloomy sentiment in Asia markets comes after a sell-off on Wall Street in Thursday's trading session, which saw all three major U.S. indexes plunge on recession fears.

The Dow Jones Industrial Average dropped 1.21%, while the S&P 500 shed 1.37% and the tech heavy Nasdaq Composite slipped 2.3%.

The Russell 2000 index, the small-cap benchmark that has rallied lately, dropped 3%.

In the U.S., fresh data stoked fears over a possible recession and apprehensions that the Federal Reserve could be too late in cutting interest rates.

Initial jobless claims rose the most since August 2023. The ISM manufacturing index, a barometer of factory activity in the U.S., came in at 46.8%, worse than expected and signaling economic contraction.

After these data, the 10-year Treasury yield dropped below 4% for the first time since February. – CNBC