US STOCKS-Futures drop on Broadcom warning, Chinese gloom
By Shreyashi Sanyal
June 14 (Reuters) - U.S. stock index futures dropped on Friday, as the long-feared hit to global growth from President Trump's trade war crystalised in slashed sales forecasts from chipmaker Broadcom, and signs of the worst slowdown in Chinese industry in 17 years.
Shares of Broadcom Inc AVGO.O plunged 9.8% 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 HWT.UL.
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.
Nasdaq 100 e-minis NQc1 pointed to a 59.5 point fall, or 0.79% fall at opening while Dow e-minis 1YMc1 slid 52 points, or 0.2%, and S&P 500 e-minis ESc1 8.75 points, or 0.3%.
The S&P has gained about 5% in June so far on hopes the Federal Reserve will reduce interest rates soon to combat slowing global growth, a stark contrast to the steady path of monetary tightening it was on until the end of last year.
The Broadcom news 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 INTC.O, Advanced Micro Devices Inc AMD.O and Micron Technology Inc MU.O down between 2.2% and 4%. Shares of Apple Inc AAPL.O 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 Group of 20 summit at the end of the month may yet yield more progress on a trade deal.
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.
On the macro front, the Commerce Department's report on retail sales for May is expected to show a 0.6% rise at 8:30 a.m. ET, following a 0.2% drop in April.
(Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; editing by Patrick Graham)