US pre-open: Stocks to nudge down amid recession fears

At 1220 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all down 0.1%.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The week’s early optimism has been clouded by renewed concerns about a looming recession in the America, while the repercussions of the banking crisis appear to be coming back to bite big US lenders.

"As the world’s largest economy shows more signs of heading for a contraction, with growth in the mighty services sector slowing more quickly than expected last month, worries are rising about the knock-on effect around the world.

"While signs of further slowing in activity is not great news for the US economy overall, it’s music to the ears of Fed policymakers who are anxious for signs that inflation is responding to monetary tightening. The ISM Services PMI reading, showing a slowdown in growth in May is another nugget of data to add to the growing weight of evidence that interest rate rises are having the desired effect, and bets are rising that the Fed will press pause next week. But it’s going to keep its powder dry and another rate hike could still come this summer."

Investors will also be digesting a surprise rate hike by the Reserve Bank of Australia, which argued that inflation was still too high.

The RBA lifted the cash rate by 25 basis points to 4.1% - the highest level in 11 years and the 12th increase in little more than a year. Economists had been expecting the Bank to leave rates unchanged.

Governor Philip Lowe: "Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range. This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe."

The RBA’s target for inflation is between 2% and 3%.

ING said the move by the RBA "may raise expectations for a similar move from the Bank of Canada tomorrow and that the Fed will sound hawkish next week - which may well frustrate dollar bears".

On the corporate front, Apple was likely to be in focus after the tech giant unveiled its new augmented reality headset, with some analysts suggesting the price tag of $3,499 could put consumers off.

Streeter said: "Questions remain about the reality of achieving bumper volumes, which have seen the share price fall back a little, but such is the cash-laden nature of the tech giant, it can afford to enter this riskier realm with an element of style and risk that other rivals may find a lot harder to emulate."