The votes are in and the U.K. has voted to leave the European Union. The financial markets braced for a knee-jerk reaction to the results of the European Union Referendum vote on Thursday night and will now awake to turmoil. Prime Minister David Cameron has announced he will step down in October.

The pound has dropped below $1.33, some 12.6%, the lowest it’s been since 1985. The FTSE 100 shed 527 points when the markets opened and US futures are sharply down with the Dow Jones estimated to be more than 400 points down. In Japan the Nikkei 225 index has plunged 8% and the Yen has significantly appreciated. (See also, How the Brexit Could Affect U.S. Investors.)

The Shanghai market, a closed market, was mildly affected and only dropped less than 2% a few hours after the result. The Euro has strengthened against the British pound by 6% but is down versus the US dollar. Google trends reported a 500% spike in searches for "buy gold" as investors looked for a safe haven. The markets in India have been trading in the red. Indian investments in the UK are bigger than the Indian investments in the rest of the EU as a whole.

The CBOE VIX spiked before the U.S. market open showing volume far beyond its normal range:

As of 6:00 am Chicago time just over 180,000 $VIX futures traded note 2016 average full day daily volume is 229,000
— CBOE (@CBOE) June 24, 2016

“I would say your real money investors, someone wanting to get hold of pounds for business reasons, would not be participating in the markets today because of the volatility. The volumes trading are quite small and contributing to the large moves that are happening," said Kymberly Martin of BNZ Markets to the New York Times. (See also, If Brexit Occurs Here's How You Should Invest.)

Brexit implies a trend as it is a strong vote against globalization and a step towards economic nationalism. This is the first time a country has voted to leave the European Union since Greenland in 1982. It is unclear how new trade deals will be negotiated, who will succeed David Cameron in October and how this will affect the British establishment that largely constituted the "remain" camp.

“I would reassure markets and investors that Britain’s economy is fundamentally strong. There will be no immediate change in how our people travel, our goods move and our services will be sold,” said Cameron in a speech this morning.

The results signify a clear break in Britain along political and class lines. The leader of the right-wing, anti-immigration UK Independence Party leader Nigel Farage said this will be a victory for ordinary and decent people. The financial capital London that is home to multinational companies voted 70% to stay.

This development reopens the question of Scotland's independence as it overwhelmingly voted to stay in the EU.