The S&P 500 futures trade 11 points, or 0.4%, below fair value following a revenue warning out of the semiconductor industry and more economic weakness in China. The tech-heavy Nasdaq 100 futures trade 1.0% below fair value.
Semiconductor stocks are on the retreat after Broadcom (AVGO 256.85, -24.76, -8.8%) said it sees a broad-based slowdown in demand due to geopolitical uncertainty and export restrictions on Huawei Technologies. Broadcom also missed revenue estimates and lowered its FY19 revenue guidance below consensus.
China, meanwhile, reported its slowest industrial output growth in 17 years in May. Industrial production grew 5.0% yr/yr, below the 5.4% growth that was expected, while fixed asset investment slowed down to 5.6% yr/yr. Many think China will commit to further stimulus measures to ease its economic difficulties, though.
In U.S. data, total retail sales increased 0.5% in May (Briefing.com consensus 0.7%) after increasing an upwardly revised 0.3% (from -0.2%) in April. Excluding autos, retail sales were also up 0.5% in May (Briefing.com consensus 0.4%) after increasing an upwardly revised 0.5% (from 0.1%) in April.
The key takeaway from the report is that the May reading was combined with an upward revision to figures for April, which largely made up for the May shortfall to headline expectations.
Industrial Production (Briefing.com consensus 0.2%) and Capacity Utilization (Briefing.com consensus 78.0%) for May will be released at 9:15 a.m. ET, followed by the preliminary University of Michigan Index of Consumer Sentiment for June (Briefing.com consensus 98.1) and Business Inventories for April (Briefing.com consensus 0.4%) at 10:00 a.m. ET.
U.S. Treasuries have declined on the heels of the retail sales report. The 2-yr yield is up four basis points to 1.86%, and the 10-yr yield is up one basis point to 2.10%. The U.S. Dollar Index is up 0.3% to 97.33. WTI crude is down 0.2% to $52.19/bbl after bouncing yesterday amid geopolitical angst between the U.S. and Iran.