US stock index futures were lower on Monday as investors assessed the implications of Britons voting to leave the European Union, a decision that sparked a global selloff on Friday.
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Within seconds of Monday’s opening bell, the Dow Jones industrial average began plummeting, dropping about 200 points in the first 10 minutes of trading on the New York Stock Exchange. The Dow is down 247.29 points or 1.4 percent at 17,153.46, the Nasdaq is down 105.64 points or 2.2 percent at 4,602.34 and the S&P 500 is down 35.23 points or 1.7 percent at 2,002.18.
Nasdaq 100 e-minis were down 32.5 points, or 0.76 percent, on volume of 52,497 contracts.
On Friday, markets across Asia collapsed as results pointed to “leave”, despite prior polls showing a narrow lead for “remain”. Britain’s benchmark FTSE 100.FTSE was down almost 9 percent at one point on Friday, but rallied to close down 3.15 percent.
“There is little doubt that global monetary policy will have to adjust to this historic decision, and with markets now pricing in a 50% chance of a July rate cut from the [Bank of England], the idea of a [Federal Reserve] rate hike appears dead in the water”, said Joshua Mahony, market analyst at IG, in a note.
Traders have priced a meager 1.9 percent bet on an interest rate increase in November, according to CME Group’s FedWatch tool.
USA banks remain under pressure. Meanwhile, gold continues to rise as investors stick with safe-haven assets. Eastern Time, followed by Markit’s flash reading on the USA services purchasing managers’ index for June, due at 9:45 a.m.
The so-called “Brexit” vote threw markets off-balance as investors anxious over the consequences and fled to safe-haven assets such as gold and government bonds. The offshore yuan, traded in Hong Kong, slid 0.8 percent against the dollar, while the onshore currency traded in Shanghai weakened 0.5 percent.
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The yield on 10-year United Kingdom government bonds TMBMKGB-10Y, -11.81% dropped below 1% for the first time ever on Monday.
