Stock index futures tracked a sharp drop in global equity markets on Monday after rating agency Standard & Poor's cut the top-tier AAA credit rating of the United States, rattling already-jittery investors.

The agency's move came late Friday after a wild week for Wall Street -- its worst in more than two years -- as lingering concerns about sluggish economic growth and heavy public debt loads in developed economies hit sentiment.

The impact of S&P's rating cut was felt in Asia and Europe. Japan's Nikkei stock average <.N225> slid 2.2 percent at the close on Monday, while the FTSEurofirst 300 index <.FTEU3> of top European shares fell 1.8 percent in early trading. MSCI's all-country world stock index <.MIWD00000PUS> fell more than 1 percent.

In U.S. trading, market sectors most sensitive to the economy, such as the banking and natural-resource sectors, were set to take the brunt of selling. United States Steel Corp fell 5.2 percent to $31.50 in premarket trading, while Citigroup Inc dropped 4.6 percent to $31.90.

Whether it (the reaction to the U.S. downgrade) holds true throughout the day is anybody's guess, given the somewhat oversold conditions that already exist in the market, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

S&P 500 futures fell 25.8 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 221 points, and Nasdaq 100 futures shed 47.5 points.

Luschini expects a S&P 500 range of 1,120 to 1,150 to attract buyers.

It may just take some testing through the day to find some buyers to be stepping in, he said.

Last week's steep selloff in equities wiped about $2.5 trillion off global market valuations. The S&P 500 has fallen over 12 percent since the end of April. Much of that selling came on heavy volume last week. The index has retreated 11 percent in the last 11 sessions.

Analysts said the S&P 500 index could test Friday's intraday low of 1,168.09. Some traders look for a pullback to the 32.8 percent retracement of the rally from the index's bear market low on March 2009. That level is around 1,100.

Peter Cardillo, chief market economist at Rockwell Global Capital in New York, said he expected an intraday reversal after sharp falls at the open, similar to Friday's action.

Hedge funds are selling out at levels that they are somewhat compelled to, so it feeds on itself said, he said. The market is grossly oversold, valuations are attractive, and I think the market at this point has already discounted a growth slowdown.

Safe-haven assets were in demand. Gold hit another record high of $1,715.01 an ounce and was set for its second largest daily gain this year.

Resource-related stocks will be under pressure as crude oil prices fell 3.7 percent to below $84 a barrel on concerns over the economic outlook. Copper fell to a five-week low.

Sentiment worsened after the S&P cut the U.S. long-term credit rating by a notch to AA-plus late Friday on concerns about debt in the world's largest economy. The downgrade could eventually raise borrowing costs for the U.S. government, companies, as well as consumers.

Moody's on Monday repeated a warning it could downgrade the U.S. rating before 2013 if the fiscal or economic outlook weakens significantly, but said it saw potential for a new debt agreement in Washington to cut the budget deficit before then.

Adding to investors' concerns, the European Central Bank intervened dramatically in bond markets, backing up a verbal pledge to support Spain and Italy with action in an attempt to avert a financial meltdown in the euro zone.

(Editing by Jeffrey Benkoe)

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