US pre-open: Stocks seen lower ahead of Fed and amid Brexit concerns

US futures pointed to a weaker open on Wall Street as investors looked to Wednesday’s Federal Reserve policy announcement and amid jitters about the upcoming EU referendum in the UK.

At 1050 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.3%, while Nasdaq futures were off 0.4%.

“US stocks look set for a lower open as oil prices dip and nerves kick in on the first day of the two-day meeting of the Federal Reserve ahead of the release of US retail sales data,” said Jasper Lawler, market analyst at CMC Markets.

“Stocks can stabilise so long as the ratio of ‘weak growth: Fed easing’ is maintained. The market needs the Fed to reaffirm a cautious stance to rate rises to find its happy place again.”

At the same time, indices in Europe were lower and government bonds rallied as investors shunned risk assets in favour of safe havens, with the yield on the 10-year German bund turning negative for the first time.

The downbeat mood was prompted by growing concerns that the UK could vote to leave the EU at the referendum next week, as polls so far this week show growing support for the Leave campaign.

Meanwhile, oil prices were in the red after the International Energy Agency said oil markets are moving close to balance in the second half of this year, with West Texas Intermediate down 1.3% at $48.24 a barrel and Brent crude down 1.1% at $49.78.

In corporate news, chip company NXP Semiconductors was likely to be focus after announcing late on Monday that it has agreed to sell its standard products business to a Chinese consortium for $2.75bn.

On the downside, however, Revance Therapeutics tumbled in pre-market trade after saying on Monday that a late-stage clinical study of its crow’s-feet treatment did not reach its main goal.

On the macroeconomic front, US retail sales and the import price index are due at 1330 BST. Business inventories are at 1500 BST.

“After an extremely strong April result, retail sales may have moderated in May, rising by 0.3% month-on-month,” said Societe Generale.

“We expect a relatively broad-based cooling in spending. Auto sales in May were similar to the pace seen in April, so we expect little contribution from this category. Meanwhile, gasoline prices in May were up about 2.7% on a seasonally adjusted basis, which may have lifted that component to a 0.5% rise. Excluding autos and gasoline, sales may have inched up by 0.3% as well.”