U.S. stock futures plunged overnight as early election results showed Republican presidential nominee Donald Trump leading in several key states.

E-mini S&P 500 futures fell 5% around midnight Eastern Time, hitting a limit designed to halt further drops, before recently paring losses to 4.1%. Equities futures are limited to a 5% loss or gain during overnight trading, CME Group Inc. spokeswoman Alex Gorbokon said. The last time stock-market futures fell 5% in after-hours trading was in the aftermath of Brexit on June 23.

Investors were once again caught off guard late Tuesday.

The S&P 500 jumped 2.2% on Monday?its biggest gain since March?and rose another 0.4% on Tuesday as investors and traders appeared more confident about a victory for Democratic presidential candidate Hillary Clinton. That came after the index posted nine consecutive sessions of losses through the end of last week as polls tightened.

"Monday and Tuesday, the assumption was Clinton would take the election in a cakewalk. Based on what we see right now, that assumption is wrong," said Jack Ablin, chief investment officer at wealth manager BMO Private Bank.

Mr. Ablin added that this selloff "isn't an emotional avalanche, this is simply a rational unwinding of a fallacious assumption." Still, if Mr. Trump wins, he said, there could be a steep selloff on Wednesday.

Stocks in Asia tumbled, with Japan's Nikkei Stock Average losing 5.4% and Hong Kong's Hang Seng falling 2.9%.

Dow Jones Industrial Average futures dropped 700 points, or3.8%, to 17585. The last time the Dow closed below 17600 was June 28, five days after the U.K. voted to leave the European Union. Changes in stock futures don't always accurately predict moves in the stock market after the opening bell.

Several investors and analysts had cited Brexit as a reason to be cautious heading into the U.S. election. The S&P 500 rose 1.3% on June 23, before the results came out, then tumbled more than 5% over the following two trading sessions. However, stocks recovered and rose to new highs over the summer.

With clients texting and asking what they should do as the U.S. results were announced, David Kotok, chief investment officer at Cumberland Advisors, had one piece of advice: "I say to them, 'You should probably get some sleep.'"

Some said the market was overreacting?that the race remained close and selling was likely to be short-lived.

"Everyone wants to be the first to panic, not the last," said BrianJacobsen, chief portfolio strategist at Wells Fargo Funds Management.

Ryan Wibberley, chief executive of Gaithersburg, Md.-based CIC Wealth, said that if the Dow Jones Industrial Average opened down 700 points on Wednesday morning, his firm would probably be buying on Wednesday, no matter who wins the presidential election. "I just think regardless, I'm not surprised the market is down, but I don't think it's going to hold for more than a week."

"There'll be good deals," he added, paused, and said, "I don't know what yet."

Write to Corrie Driebusch at corrie.driebusch@wsj.com, Aaron Kuriloff at aaron.kuriloff@wsj.com and Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

November 09, 2016 02:55 ET (07:55 GMT)

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