US pre-open: Stocks stumble as China data continues to disappoint

US stock futures were pointing to a weak start on Wall Street on Tuesday, as investors reacted to fresh concerns about the Chinese economy on a quiet day for corporate earnings.

In pre-market trade, the Dow Jones and S&P 500 were seen down 0.4%, while the Nasdaq was showing losses of 0.3%.

Economic data from China overnight revealed that July retail sales rose 2.5% on an annualised basis, well below expectations of a 4.5% increase. Meanwhile, industrial production increased 3.7% year on year. missing the 4.4% increased by analysts.

Fixed asset investment rose by 3.4% for the first seven months of the year from a year ago, below expectations of a 3.8% increase.

Also, the country's statistics bureau controversially suspended publication of youth unemployment figures.

Meanwhile, in a surprise move, the People's Bank of China cut the medium-term lending facility rate – the interest for one-year loans to financial institutions – from 2.65% to 2.5%.

"Policy action overall has underwhelmed, and investors are looking for a lot more welly before being more confident that the economy may have more insulated from the downturn," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Back in the US, retail sales figures for July will be out at 1330 ET on Tuesday, and are expected to show that growth picked up from 0.2% to 0.4% last month.

The market is still keeping its eye fixed on US economic data after mixed inflation figures last week did little to settle investors' fears about whether or not the Federal Reserve will pause hiking interest rates at its next policy meeting.

In company news, as second-quarter earnings season starts to wind down, eyes will turn to the last remaining companies on the bill. Retail heavyweights Home Depot, Walmart and Target are all due to report this week.

Home Depot was up first, beating forecasts for both revenue and profits. However, sales still declined 2% year-on-year to $42.92bn and the company maintained guidance for a 2% to 5% fall in revenues for the full year. The company unveiled a $15bn share buyback programme alongside its results.