By Chris Matthews and Barbara Kollmeyer, MarketWatch

Hong Kong stocks drop over 2%

U.S. stock-index futures were under pressure Friday, as trade optimism continued to fizzle out and investors focused on a batch of weaker-than-expected economic data out of China, sparking fresh worries about the state of the world's second-biggest economy.

How are the benchmarks trading?

Dow Jones Industrial Average futures fell 208 points, or 0.9%, to 24,362, while S&P 500 futures dropped 21.60 points, or 0.8%, to 2,650. Nasdaq-100 futures fell 62 points, or 0.9%, to 6,692.

On Thursday, the Dow Jones Industrial Average finished up 70.11 points, or 0.3%, 24,597.38, after rallying more than 200 points at the session high. The S&P 500 index edged down slightly to 2,650.54 and the Nasdaq Composite Index finished down 0.4%.

With one more session to go, the Dow is looking at a weekly gain of 0.9%, with the S&P 500 up 0.7% and the Nasdaq Composite ahead of the pack, up 1.5%.

Read:Here's why frustrated stock-market traders say 'neither bulls nor bears' are in charge (http://www.marketwatch.com/story/stock-markets-repeated-reversals-show-neither-bulls-nor-bears-are-in-charge-2018-12-13)

(http://www.marketwatch.com/story/stock-markets-repeated-reversals-show-neither-bulls-nor-bears-are-in-charge-2018-12-13)And:'People are underinvested' and they're going to miss out, warns Wall Street vet (http://www.marketwatch.com/story/people-are-underinvested-and-theyre-going-to-miss-out-warns-wall-street-vet-2018-12-13)

What's driving the market?

Fresh evidence that global trade tensions are hitting the world's second-biggest economy emerged Friday, as China released data (http://www.marketwatch.com/story/china-economic-activity-mostly-slowed-in-november-2018-12-14) that showed both industrial output and retail sales for November missed economists' forecasts. China's National Bureau of Statistics (http://www.stats.gov.cn/english/PressRelease/201812/t20181214_1639530.html) attempted to cool concerns, saying the economy "performed within the reasonable range."

However, those words appeared to fall on deaf ears as investors continued to push aside trade optimism, and instead focused on collateral damage from the back and forth. Investors have been weighing several pieces of news over the past few days showing that trade tensions between the U.S. and China may be cooling, with optimism driving investors into equities.

The effect of these data may be tempered by news of actual changes to Chinese trade policy as a result of the ongoing U.S.-China negotiations. China's Ministry of Finance announced Friday (https://www.reuters.com/article/us-china-usa-auto/china-says-to-suspend-additional-tariffs-on-u-s-made-cars-from-january-1-idUSKBN1OD165) that it would suspend a series of tariffs on American-made automobiles and parts for three months starting Jan. 1, according to Reuters. This follows one day after China's first major purchase (https://www.bbc.com/news/business-46562384) of U.S. soybeans since it raised tariffs on the legumes in July.

Traders will also be focused on a series of economic releases slated for Friday, with retail sales figures, industrial production numbers, inventory figures, and preliminary readings of IHS Markit's purchasing manager index surveys due later in the morning.

What stocks are in focus?

Shares of Costco Wholesale Corp. (COST) fell 3.5% in premarket trade, after a Thursday-evening earnings release showed the retailer missed revenue expectations for the fiscal first quarter.

Adobe Inc. (ADBE) stock was down 2% before the bell Thursday, after the software company missed earnings expectations (http://www.marketwatch.com/story/adobe-stock-wobbles-as-earnings-miss-revenue-beats-2018-12-13) for the fourth quarter.

Shares of Starbucks Corp. (SBUX) are in focus Friday, following its investor day Thursday, when the company announced ambitious plans for expansion in China, as well as a plan to return $25 billion to shareholders between now and 2020. The stock was down 3% in premarket trade.

XPO Logistics(XPO) stock is in focus after the release of a short seller report (https://www.barrons.com/articles/xpo-stock-hit-by-short-sellers-report-51544726996) on Thursday that accused the company of hiding poor returns with aggressive accounting tactics. Thursday evening, the company responded (http://www.marketwatch.com/press-release/xpo-logistics-responds-to-todays-misleading-report-from-a-short-selling-firm-2018-12-13) to the report, accusing it being "intentionally misleading." The stock was up more than 5% in premarket trade, after falling more than 26% during trade Thursday.

Sealed Air Corp. (SEE) stock rose 1.9% before the bell, after the company approved a restructuring plan.

What data are ahead?

Investors will get a snapshot of the health of the American consumer at 8:30 a.m. Eastern, when the Commerce Department releases retail sales figures for the month of November.

The Federal Reserve will issue its estimate of industrial production for the month of November at 9:15 a.m., along with its reading of capacity utilization.

The Commerce Department will issue its estimate of growth in business inventories at 10 a.m.

At 10:15 a.m., investors will receive initial readings IHS Markit's purchasing managers indexes for both the manufacturing and services sectors.

What are analysts saying?

"Indeed, investors are right to be worried about global growth as China economy continues to sputter," said Stephen Innes, head of Asia Pacific trading at Oanda, in a note to clients. "The data lend support to the market's view that things will get worse in China before they get better, this despite investment rising."

How are other markets trading?

(http://www.marketwatch.com/story/asia-stocks-rally-into-a-second-day-with-hong-kong-markets-in-the-lead-2018-12-12)In Asia, Hong Kong's Hang Seng Index dropped 1.6% (http://www.marketwatch.com/story/asia-stocks-take-a-hit-from-economic-data-early-friday-following-2-days-of-gains-2018-12-13), while the Nikkei 225 index fell 2%, not helped after a cautious business outlook (http://www.marketwatch.com/story/japan-big-manufacturers-business-outlook-cautious-2018-12-14) from big manufacturers in Japan. (http://www.marketwatch.com/story/asia-stocks-rally-into-a-second-day-with-hong-kong-markets-in-the-lead-2018-12-12)Europe stocks were also seeped in red.

Crude prices were under pressure, with gold slipping and the U.S. dollar rising.

(END) Dow Jones Newswires

December 14, 2018 08:13 ET (13:13 GMT)