Coverage: British vote to leave EU sends markets into turmoil

The British people voted Thursday to leave the European Union, sending markets worldwide into turmoil.

Stephen Gandel of Fortune had the outlook for the U.S. stock market:

Dow Jones industrial average futures were predicting that the gauge could open down nearly 650 points when stocks start trading on Friday, after the U.K. voted to leave the EU. The pro-Brexit vote could derail the British economy, and add uncertainty to markets. Somelike George Soros predicted the pound would plunge if Britain were to vote to leave the EU. The pound did drop 10% overnight, though not as much as Soros predicted.

If stocks were to drop as much as predicted on Friday it would be the sixth worst daily point dive in Dow history. The five other worst days came during the 2008 financial crisis and the 2001 dot.com bust.

Percentage-wise—at a less than 4% drop—it wouldn’t rank in the top 15 worst days in Dow trading history.

The S&P 500 futures were predicting a bigger percentage drop in the market, showing that stocks on that gauge would be down nearly 5% on Friday.

Matt Krantz of USA Today noted that the vote surprised investors, which had been sending the stock market higher in anticipation of the United Kingdom remaining in the E.U.:

The events stunned investors who were counting on early polls as a reliable predictor, showing support to remain in the EU. Investors during regular trading Thursday had sent the Dow 230 points higher and the Standard & Poor’s 500 index to within 1% of a new record close as traders and investors bet that  a “Brexit” would be off the table. Most polls during the day indicated that voters would not support leaving the EU.

That made the impact from the unprecedented decision even more severe. Japan’s Nikkei 225 index dropped 7.9 percent in volatile trading following the U.K. vote, closing below 15,000 for the first time in more than four months. That’s the steepest drop in more than 16 years.

In Europe, the German DAX plunged 8%, while London’s FTSE 100 slid nearly 8% and the broad Stoxx Europe 600 index was down 8%. France’s CAC 40 was off 9%.

The British sterling dropped 10% to a 31-year low and the euro fell by 3.8%. Meanwhile, the yen surged, briefly trading below 100 yen to the dollar for the first time since November 2013.

The price of West Texas Intermediate crude, the U.S. benchmark, slid 4.8% to $47.73 a barrel, down $2.38. The global benchmark, Brent crude, was down 4.8% to $48.49 a barrel.

As investors looked for safe havens, gold rose nearly 5% to more than $1,325 an ounce.

Ian Talley of The Wall Street Journal examined the impact on the U.S. economy:

U.S. officials worry a Brexit will weaken the U.S. economy if growth in America’s largest trading partner, the EU, takes a hit from a U.K. decision to leave. U.S. markets swooned and swelled in recent weeks in tandem with polls that showed a Brexit more or less likely to succeed.
“The U.K. vote to exit the European Union could have significant economic repercussions,” Janet Yellen, chairwoman of the U.S. Federal Reserve, told Congress this week. A Brexit would “usher in a period of uncertainty” and fuel volatility in world markets. “That would negatively affect financial conditions and the U.S. economy.”

U.S. Treasury Secretary Jacob Lew said ahead of the vote, “I only see negative economic outcomes” were voters to decide to leave the EU.

At the same time, Washington frets Brexit will cause strategic and diplomatic rifts between the U.S. and many of its closest global allies.