US pre-open: Stocks seen flat ahead of UK's EU referendum

US futures pointed to a broadly flat open on Wednesday following two days of gains, a day before the UK votes on its European Union membership.

At 1045 BST, Dow Jones Industrial, S&P 500 and Nasdaq futures were up just 0.1%.

At the same time, oil prices were mixed, with West Texas Intermediate down 1.1% at $48.85 a barrel and Brent crude 0.8% firmer at $51.00.

Joshua Mahony, market analyst at IG, said: “With less than 24 hours left until the UK hits the polling booth, there is a tangible feeling of uncertainty and anxiety permeating through financial markets this morning, with the bullish sentiment that started the week is short supply. We have a whole host of economic data points between now and Friday, yet the fact of the matter is that there is unlikely to be much which will avert the gaze of the trading community from the very real possibility of a Brexit.

“With betting markets and the IG binary (78% remain) all pointing towards a substantially higher likeliness of a ‘remain’ vote tomorrow, it is also likely that the wider markets also reflect this same bias. As such, while this vote is a binary one (yes or no), the market repercussions are likely to be substantially larger should the UK leave the EU.”

Investors will be turning their attention to Federal Reserve Chair Janet Yellen again as she delivers the second part of her two-day testimony before Congress at 1500 BST, after she reiterated a cautious approach to hiking interest rates on Tuesday.

Yellen said she sees “considerable uncertainty” over the US economic outlook, also highlighting the potential impact of the UK referendum.

“In the current environment of sluggish growth, low inflation, and already very accommodative monetary policy in many advanced economies, investor perceptions of and appetite for risk can change abruptly,” Yellen said. “One development that could shift investor sentiment is the upcoming referendum in the United Kingdom. A UK vote to exit the European Union could have significant economic repercussions.”

On the corporate front, Tesla Motors slumped nearly 11% in pre-market trade after the electric car maker said late on Tuesday that it had offered to buy SolarCity Corp.

Barnes & Nobles was among the companies due to report earnings ahead of the open.

On the macroeconomic calendar, US existing home sales are due at 1500 BST.