(For a live blog on the U.S. stock market, click or type LIVE/ in a news window.)
* Broadcom tumbles after warning chip demand slowdown
* China’s May industrial output growth cools to 17-yr low
* Data shows U.S. retail sales rise in May
* Futures down: Dow 0.13%, S&P 0.22%, Nasdaq 0.70% (Updates prices, adds comments)
By Shreyashi Sanyal
June 14 (Reuters) - Wall Street was set to drop at the open on Friday, as the long-feared hit to global growth from President Donald Trump’s trade war crystallized in slashed sales forecast from chipmaker Broadcom, and more signs of slowdown in Chinese industry.
Shares of Broadcom Inc plunged 8.6% in premarket trading after it cut its revenue forecast for 2019 by $2 billion, blaming the U.S.-China trade conflict and export curbs on Huawei Technologies Co Ltd.
Data from China showed industrial output growth in the world’s second largest economy slowed to a more than 17-year low in May, sending a chill through stock market investors globally.
“Broadcom is definitely leading markets lower and that might drive other chips lower as well. Some of it is also about the U.S.-China trade war and the fight over Huawei,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
“China was to be expected because tariffs are having an effect on them and that’s starting to show up.”
At 8:41 a.m. ET, Dow e-minis were down 33 points, or 0.13%. S&P 500 e-minis were down 6.5 points, or 0.22% and Nasdaq 100 e-minis were down 52.5 points, or 0.7%.
The S&P 500 index has gained about 5% in June so far on hopes the Federal Reserve will soon cut interest rates, a stark contrast to the steady path of monetary tightening it was on until the end of last year.
The dour forecast from Broadcom was one of the clearest indications yet from the trade-sensitive tech sector of the scale of pain companies can expect from Washington’s stand-off with China.
Semiconductors stocks, who both source product and sell heavily in China, tumbled, with Intel Corp, Advanced Micro Devices Inc and Micron Technology Inc down between 2% and 3.2%. Shares of Apple Inc also slipped 1.2%.
A Fed meeting next week may provide the acid test of market expectations that the U.S. central bank could cut rates as much as three times this year, while a G20 summit at the end of the month may yet yield more progress on a trade deal.
Data showed U.S. retail sales increased in May, although slightly below expectations, suggesting a pick-up in consumer spending that could ease fears the domestic economy was slowing down sharply in the second quarter.
In the latest salvo between the two sides, China said on Friday it was raising anti-dumping duties on certain alloy-steel seamless tubes and pipes from the United States and the European Union by as much as 10 times. (Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; editing by Patrick Graham and Arun Koyyur)