US pre-open: Stocks set to move lower as Brexit uncertainty continues to weigh

Wall Street was set to start the session clearly lower as markets continued to be unsettled by the newsflow surrounding Brexit, which added to the already existing uncertainty around Italy´s banking system and the Chinese economy.

Adding to the negative sentiment, analysts at Goldman Sachs said the S&P 500 might be set for further losses in the very near-term before recovering heading into the close of 2016.

As of 13:54 BST the Dow Jones mini futures contract was surrendering 102.00 points to 17,600, alongside losses of 12.50 points to 2,070.50 for a similar contract for the Nasdaq-100 and losses of 29.25 points to 4,374.75 for the S&P 500 mini.

Acting as a backdrop, some market commentary was referencing remarks from New York Federal Reserve president William Dudley who reportedly that the implications of Brexit might be greater were it to trigger turmoil in markets beyond the UK.

"Risk aversion is driving financial markets for a third day on Wednesday, with equity markets coming under pressure, bond yields falling and safe haven assets such as Gold and the yen on the rise.

"Negativity finally appears to have gripped investors after following a rebound last week that appeared to suggest that Brexit fears were easing. These have ramped up this week with the latest concerns coming from the commercial property sector after funds blocked withdrawals due to a lack of liquidity in the market," said Craig Erlam, senior market analyst at Oanda.

The yield on the benchmark 10-year US Treasury note was off by four basis points at 1.34%, having hit 1.32% earlier in the session.

Yields on similarly-dated government debt issued by Australia, Japan, Germany, France and the UK were all also trading at record lows.

According to David Kostin, chief US equity strategist at Goldman Sachs, the S&P 500 might be set to fall by as much as 10% before rebounding to end 2016 at 2,100 points.

On the economic front, traders were waiting on the release of the minutes of the US central bank´s most recent policy meeting on 14 to 15 June which weredue out at 19:00 BST.

Ahead of those, the Department of Commerce reported that the US trade deficit swelled from -$37.4bn in April to -$41.0bn in May (consensus: -$40bn).

The ISM´s services sector purchasing managers´ index was due to be released at 15:00 BST.

Front month West Texas Intermediate crude oil futures were trdang lower by 0.91% to $46.18 per barrel on NYMEX, while gold futures on COMEX were tacking on a further 0.96% to change hands at $1,371.80/oz..