US pre-open: Stocks set for downbeat open as Brexit weighs

At 1115 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.5%, while Nasdaq futures were 0.6% lower.

Joshua Mahony, market analyst at IG, said: “The name of the game now is stability and for that reason Osborne is crucial despite his previous support for the remain camp. Amid all the calls for Corbyn’s head and the clamour for the new PM role, financial markets are trying to ascertain what this will truly mean for the UK, the European Union and global stability.

“There is little doubt that global monetary policy will have to adjust to this historic decision and with markets now pricing in a 50% chance of a July rate cut from the BoE, the idea of a rate hike appears dead in the water. Elsewhere, Friday’s flight to safety saw USDJPY hit a 31 month low, driving easing expectations from the BoJ higher once more.”

George Osborne said on Monday that the UK was ready to face the future “from a position of strength”, adding that there would be no immediate emergency Budget.

Looking to calm financial markets in his first public address since the referendum results, the Chancellor said in a statement: “Growth has been robust and employment is at a record high. Our economy is now about as strong as it could be to confront the challenge the country now faces."

After the result of the EU referendum, the Bank of England said it stood ready to provide £250bn of additional funds to support the UK’s banks.

In currency markets, the dollar was enjoying further gains on Monday as the pound slid to $1.3269 from $1.3676 late on Friday in New York.

Societe Generale strategist Kit Juckes said: “The extent of the uncertainty that now clouds the UK’s economic and political outlook is hard to exaggerate. The government is in limbo ahead of a Conservative Party leadership contest. The opposition is in chaos. The rest of the EU would like negotiations on the UK’s exit to begin but they have no-one to negotiate with.

“Uncertainty is negative for the UK economy, for investor confidence and obviously, for the pound. Sterling has now fallen by 9% against the US dollar since the eve of the UK referendum, and we look for an eventual move in GBP/USD to 1.20- 1.25.”

Oil prices were steady, recovering from the heavy losses seen on Friday. West Texas Intermediate was down 0.1% at $47.60 a barrel and Brent crude was 0.1% firmer at $48.46.