© Reuters. Top 5 things to know today in financial markets© Reuters. Top 5 things to know today in financial markets

Investing.com – Here are the top five things you need to know in financial markets on Tuesday, May 29:

1. Sea Of Red In Europe As Italy Risk Rocks Markets

A in Italy provoked a second day of heavy selling on European financial markets, with the , and for the government in Rome.

Italy’s led losses across the continent, with the index down around 3%.

Investors also fled Italian debt, as the soared by 172 percentage points to 2.42%, the biggest one-day rise since 1992.

Italy’s anti-establishment parties abandoned plans to form a coalition government after the country’s president, Sergio Mattarella, refused to accept their euroskeptic candidate for economy minister.

Mattarella then asked Carlo Cottarelli, a former International Monetary Fund official, to try to form a new government, with snap elections expected.

Financial markets fear that the elections, which could take place as early as August, may become a de facto referendum on Italian membership of the currency bloc and the country’s role in the European Union.

That sparked the euro to slip below the $1.16 level for the first time since late 2017, while the gap between Italian and German 10-year bond yields – a measure of Italian risk – widened to its highest in over four years.

Meanwhile, political uncertainty in Spain hit , as Prime Minister Mariano Rajoy’s struggle to stay in power raised fears of new elections.

2. Dow Futures Drop 200 Points

, as investors returning to their desk after a long weekend monitored political turmoil in Italy, while awaiting fresh data and earnings.

At 5:50AM ET, the blue-chip sank 200 points, or about 0.8%, the slumped 21 points, or nearly 0.8%, while the tech-heavy indicated a decline 47 points, or roughly 0.7%.

U.S. stocks were closed Monday due to the Memorial Day holiday.

On the earnings front, Booz Allen Hamilton (NYSE:) and Momo (NASDAQ:) are scheduled to publish their latest corporate results ahead of the open, while Salesforce.com (NYSE:) and HP (NYSE:) are due after the bell.

In data, the (HPI) is set to be released at 9AM ET, followed by at 10AM ET and the at 10:30AM ET.

3. Treasurys Rally Amid Risk-Off Mood

In another sign that investors were flocking to safer bets, U.S. government debt prices posted sharp gains.

The yield on the benchmark fell to a six-week low of 2.799%. It last stood at around 2.85%, down 8.6 basis points.

The yield on the was also deep in the red at 3.02%.

Core European bond prices also rallied amid the risk-off atmosphere across global markets.

dipped 6.0 basis points to 0.27%, hitting the lowest in more than five months with its fifth straight decline.

4. Dollar Jumps To Near 7-Month Highs

The lack of risk appetite ploughed cash into the U.S. dollar, lifting the , which benchmarks the greenback against a basket of six global currencies, to 94.91, the highest since November 7.

But against safe haven yen, it dipped 0.6% to a three-week trough of 108.75 ().

The euro sank 0.9% against the dollar to 1.1519 (), the weakest in almost seven months.

The British pound fell 0.5% to 1.3240 (), the weakest in about six months.

5. Oil Prices Stay Under Pressure

, amid expectations that Saudi Arabia and Russia would pump more oil to ease a potential shortfall in supply.

futures were up 20 cents, or around 0.3%, at $75.50 a barrel, within sight of their lowest since May 8 at $74.53 reached in the last session.

was down $1.36, or 2%, at $66.53 a barrel, sitting around its lowest since April 17.

The U.S. benchmark did not settle on Monday due to the Memorial Day holiday.