By Amruta Khandekar and Ankika Biswas

(Reuters) - U.S. stock index futures slipped into red on Friday as lingering concerns over the banking sector's health steered investors away from financial stocks despite reassurances from authorities.

Treasury Secretary Janet Yellen's reassurances that measures will be taken to keep Americans' deposits safe amid turmoil in the banking sector, sparked by the collapse of two U.S regional banks, had driven Wall Street's main indexes higher on Wednesday.

The comments added to the upbeat mood fueled by growing expectations that central banks were close to ending their aggressive rate hike campaign as the Fed and the Bank of England signaled caution about their next moves amid the global banking crisis after raising rates as expected.

"The volatility is continuing because the concerns are still bubbling about just how stable the U.S. banking sector is," said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

"Although they (central bankers and the U.S. Treasury) are trying to reassure markets that they'll be standing by to take action if necessary, what investors are taking this as is the fact that regulators, central bankers and the U.S. government is still concerned about the potential for contagion."

Shares of major U.S. banks JPMorgan Chase & Co (NYSE:), (NYSE:) and Bank of America (NYSE:) dropped more than 2% in premarket trade.

Shares of regional lenders (NYSE:), PacWest Bancorp, Western Alliance (NYSE:) Bancorp and Truist Financial (NYSE:) Corp fell between 2.1% and 2.8%.

European banks also came under pressure, with a report of a U.S. probe on Credit Suisse and UBS further souring the mood. Their U.S.-listed shares were down about 6% each.

With traders' bets now tilted towards a pause in the Fed's rate hikes in May, U.S. Treasury yields fell for a third straight day, with the yield on the two-year note last at 3.6%.

On the economic data front, a report due at 8:30 am ET is expected to show orders for durable goods rose last month, while S&P Global (NYSE:)'s survey due after the opening bell is expected to show a weakening in U.S. manufacturing activity in March.

Investors will also keep an eye out for remarks by Fed's St. Louis President James Bullard on the U.S. economy and monetary policy later in the day.

At 6:35 a.m. ET, were down 304 points, or 0.94%, were down 31.5 points, or 0.79%, and were down 59 points, or 0.46%.

Among major movers, Block Inc slumped 4.2% in premarket trading, and looked set to extend losses from Thursday when Hindenburg Research disclosed short positions in the payments firm.