Investing.com – Wall Street futures tumbled on Friday as markets were surprised by the victory of Brexit, or a vote for Britain to leave the European Union (EU), in the U.K. referendum.
The blue-chip Dow futures tumbled 546 points, or 3.05%, by 11:05AM GMT, or 7:05AM ET, the S&P 500 futures sank 80 points, or 3.79%, while the tech-heavy Nasdaq 100 futures shed 168 points, or 3.77%.
After U.S. stocks rallied more than 1% on Thursday, investors were fleeing risk assets after the surprise results of Britain’s vote on its EU membership with British Prime Minister David Cameron announcing he would step down in October based on the Remain defeat, saying he would “attempt to steady the ship” over the coming weeks and months.
London’s FTSE 100 crashed more than 6%, with the pound tumbling to lowest level since 1985 and its biggest drop on record.
Bank of England (BoE) governor Mark Carney insisted that the central bank was “well prepared” to support markets, ready to provide more than £250 billion ($347 billion) of additional funds through its normal facilities.
Following quickly in the BoE’s footsteps, the European Central Bank (ECB) said that it too “stands ready to provide additional liquidity, if needed, in euro and foreign currencies.”
“The ECB has prepared for this contingency in close contact with the banks that it supervises and considers that the euro area banking system is resilient in terms of capital and liquidity,” the euro area central bank added.
It remained to be seen if the Federal Reserve (Fed) would publish any statement on the referendum outcome.
Fed chair Janet Yellen had commented that a Brexit could have significant economic repercussions, but her first scheduled appearance will take place on June 29.
Meanwhile, investors fled to safe-haven assets with yields on U.K. sovereign bonds, known as gilts, hitting record lows, while gold rallied to 27-month highs on Friday and the yen hit its highest level against the dollar since November 2013.
Oil, considered a riskier asset, plunged on Friday amid the flight from risk and a stronger dollar.
U.S. crude futures slumped 4.93% to $47.64 by 11:05AM GMT, or 7:05AM ET, while Brent oil traded down 5.03% to $48.35.
Energy traders looked ahead to Friday's rig count report from Baker Hughes for further indications on whether U.S. shale producers are continuing to return online, as oil prices stabilize. A week earlier, the U.S. oil rig count rose by nine to 337 for the week ending on June 10, representing their third straight weekly increase.
On the economic calendar for Friday, market participants will eye May durable goods orders and the final reading of the Univerisity of Michigan’s consumer sentiment for June.