US pre-open: Stock futures fall on Brexit jitters

US stocks futures dropped on Monday as investors showed caution ahead of Britain’s European Union referendum and the Federal Reserve’s interest rate decision.

Dow Jones Industrial Average futures dipped 52 points to 17,724, S&P 500 futures fell 6.3 points to 2,081 and Nasdaq futures slipped 15.25 points to 4,442.

“Risk aversion continues to drive markets ahead of the US open on Monday, as investors seek safety ahead of a number of key risks events over the next couple of weeks,” said Craig Erlam, senior market analyst at Oanda.

“The UK referendum next week is right at the top of this list given the destabilisation effects that a vote to leave the EU could have on global markets.

“Should the UK vote to leave the EU next week, it would be a massive test of the markets ability to deal with a significant blow.”

Worries about a possible Brexit grew after recent polls showed more Britons in favour of leaving the European Union before the 23 June referendum.

The ORB poll for the Independent showed 55.0% said they were now backing the option to leave the EU, against 45.0% who said they were supporting 'Remain'.

A poll by the Financial Times showed 'Leave' has taken the lead for the first time, at 46% versus the Remain camp's 44%.

Uncertainty surrounding the EU referendum is also expected to see the Federal Reserve holding fire on raising interest rates on Wednesday. Weak jobs data and dovish remarks by Fed chair Janet Yellen have also added to bets the central bank will keep rates unchanged at this week’s policy meeting.

Elsewhere, data showed China industrial production held steady in May but retail sales and investment growth slowed.

Industrial output rose 6% in May from a year earlier, the National Bureau of Statistics said, in line with the previous month’s growth and analysts’ expectations.

Retail sales rose 10% year-on-year in May, missing forecasts for a 10.1% increase and following a 10.1% gain the previous month.

China’s fixed asset investments, excluding rural, climbed 9.6% year-on-year in May compared to a 10.5% increase in April. Economists had pencilled in no change.

A drop in oil prices also weighed on investor sentiment. Data showing an increase in US oil rigs pushed West Texas Intermediate crude down 1.09% to $48.54 per barrel and Brent down 1.09% to $48.54 per barrel at 1236 BST.

Baker Hughes said the number of rigs drilling for oil in the US rose by three in the week ended June 10, the second straight weekly increase, adding to worries about the global supply glut.

On the corporate front, Apple shares fell in pre-market trade as the iPhone maker begins its annual developers’ conference on Monday. Details of the latest mobile operating system, a new Watch and Mac hardware are expected to be revealed.

Symantec Corp. slid ahead of the opening bell after the computer security group said it would buy Blue Coat Systems for $4.65bn.