Wall Street was set to open lower on Monday, tracking European stocks, as uncertainty over the impact of Britain leaving the European Union limited the appetite for risk.
US banks that have large London operations remained under pressure. Citigroup, Bank of America and JPMorgan were all down nearly 2 percent in premarket trading.
Financial stocks were among the top losers on the S&P 500 index on Friday, swept up in the wake of the shock “Brexit” vote as investors fled to safe-haven assets.
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The selloff eroded $2.08 trillion in market capitalization globally – the biggest one-day loss ever, according to Standard & Poor’s Dow Jones Indices, trumping the Lehman Brothers bankruptcy during the 2008 financial crisis.
European stocks were hammered for a second day and the sterling fell more than 2 percent. The European banks index on Monday hit its lowest since July 2012.
The market impact on Brexit has been orderly so far and there are no signs of a financial crisis arising from Brexit, US Treasury Secretary Jack Lew said in an interview to CNBC.
However, uncertainty surrounding when and on what terms Britain will end its membership is expected to keep markets volatile for the next few weeks.
“There is a crisis of confidence in the markets,” said Todd Morgan, Chairman at Bel Air Investment Advisors in Los Angeles, California. “But there is a lot of cash lying around and interest rates are low, the world will survive.”
Dow e-minis were down 114 points, or 0.66 percent at 8:09 a.m. ET, with 75,204 contracts changing hands.
S&P 500 e-minis were down 12.5 points, or 0.62 percent, with 485,788 contracts traded.
Nasdaq 100 e-minis were down 32.5 points, or 0.76 percent, on volume of 52,497 contracts.
The dollar and gold rose, while the yield on the 10-year US treasury bond fell on Monday.
The Brexit vote, which Federal Reserve Chair Janet Yellen had said would have significant repercussions on the US economic outlook, is expected to scuttle the Fed’s ability to raise short-term interest rates.
Traders have priced a meager 1.9 percent bet on an interest rate increase in November, according to CME Group’s FedWatch tool.
Yellen pulled out from the ECB Forum on Central Banking summit starting on Monday.
Cruise operator Carnival Corp’s shares fell nearly 6 percent to $42.85 after Susquehanna cut price target.