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U.S. banks were getting clobbered in premarket trading Friday after the United Kingdom voted in favor of leaving the European Union in an unprecedented vote.
Shares of Goldman Sachs sank more than 6 percent before the opening bell, while Morgan Stanley's dropped more than 7 percent. JPMorgan Chase and Bank of America were also weighed down by the U.K. vote, trading about 4.8 percent and 6 percent lower, respectively.
U.S. stock index futures also tumbled Friday, with Dow Jones futures breaking below an implied open down more than 700 points overnight, before paring losses to show an implied open down around 450.
The U.S. Securities and Exchange Commission's limit-down rule comes into effect when equity securities fall by 5 percent or more. This is designed to control market volatility by preventing trade in securities after large and sudden price moves.
Overseas, the Stoxx European Banks index fell more than 10 percent.
London's benchmark FTSE 100 stock index accelerated losses after it opened at 3 a.m. ET to trade as much as 7.9 percent lower, before trading about 5 percent lower. The French CAC traded 7.3 percent lower and the German DAX was down 6.2 percent.
"It is important to keep things in perspective, but in the short-term, we need to brace ourselves for more volatility," Andrew Sentance, senior economic adviser at PwC, said in a note on Friday.
Sterling fell as much as 10 percent against the U.S. dollar early on Friday, before paring some losses to trade 6.6 percent lower at $1.3888.
A bid for "safe-haven" assets early on Friday saw 10-year U.S. Treasury notes rally to yield 1.51 percent and spot gold prices rise by more than 4 percent to $1,378 per ounce. Brent and WTI crude futures for August fell about 4 percent, to around $48.59 and $47.85, respectively.
"Today's trading day is rotten and it is the worst day that I have seen in my career. Moves like these do not happen every day or even every decade," London-based Naeem Aslam, chief market analyst at Think Forex, said in a note on Friday.