* U.S. Treasury yields dip due to safety buying
* Bank stocks decline in tandem with bond yields
* U.S. crude falls on expected Saudi and Russian output boost
* Futures down: Dow 0.6 pct, S&P 0.49 pct, Nasdaq 0.33 pct
(Adds details, updates prices)
By Medha Singh
May 29 (Reuters) - U.S. stock index futures pointed to a lower open on Tuesday as investors switched cash into perceived safe havens of global financial markets due to a deepening political crisis in Italy.
European financial markets saw a second day of heavy selling due to fear that repeat elections - which now seem inevitable in the euro zone's third largest economy - may become a de facto referendum on Italian membership of the currency bloc. MKTS/GLOB
On Monday, Italy's president set the country on a path to fresh elections by appointing a former International Monetary Fund official as interim prime minister with the task of planning for snap polls and passing the next budget. of U.S. 10-year Treasury bonds US10YT=RR , traditionally a safe haven for capital at times of global political stress, rose and yield fell to their lowest level since early April at 2.8477 percent.
That pushed down shares of major U.S. banks, for whom benchmark yields influence what return they get on deposited capital and for borrowing. Citigroup (NYSE:C) C.N , JPMorgan (NYSE:JPM) JPM.N and Goldman Sachs (NYSE:GS) GS.N fell between 1.2 percent and 1.6 percent.
"The kick-off to a shortened trading week is looking ugly as Italy's political woes weigh heavily on the global markets," noted Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"A crisis of confidence for the euro seems almost inevitable, which is fortifying the greenback and sending bond yields lower as the safety trade overrules."
At 9:02 a.m. ET, Dow e-minis 1YMc1 were down 145 points, or 0.59 percent. S&P 500 e-minis ESc1 were down 13 points, or 0.48 percent and Nasdaq 100 e-minis NQc1 were down 22.25 points, or 0.32 percent.
At these levels, the S&P 500 is set to open below its 100-day moving average, a key technical level. All 28 components of the blue-chip Dow were in the red in premarket trading.
Shares of energy companies were weighed down by an about 1 percent drop in U.S. crude futures CLc1 to $67.16 on expectations that Saudi Arabia and Russia could pump more crude to compensate for a potential supply shortfall. O/R
Exxon Mobil (NYSE:XOM) XOM.N fell 0.4 percent, while Chevron (NYSE:CVX) CVX.N was down 0.8 percent. Halliburton (NYSE:HAL) HAL.N slipped 1.5 percent.
U.S. President Donald Trump said on Tuesday meetings were being held to set up a summit with North Korea and confirmed that a top North Korean official was en route to New York. The move is the latest indication that an on-again-off-again summit with Trump may go ahead. Louis Fed President James Bullard said the Federal Reserve will find it difficult to raise interest rates beyond the settings of its Japanese and European counterparts, which are still pursuing accommodative policy. for May consumer confidence index, due at 10:00 a.m., is likely to show a reading of 128.0, down from 128.7 the month before.