China weakness; Mixed markets; Retail sales

Industrial production and retail sales, key indicators of economic activity, cooled sharply last month, according to government data released Wednesday. That could spook investors, who had been tracking signs of China's recovery earlier this year.

The softness comes as the trade war between the United States and China is back in full swing.

Higher US tariffs on Chinese exports worth $200 billion, enacted last week, have been weighing on markets and are expected to hit growth. The threat of US tariffs on another batch of exports worth $300 billion looms large.

The big question now: Will Beijing move ahead with additional stimulus measures? Analysts say that's increasingly likely.

2. Mixed markets: The trade fears that have gripped Asian markets in recent days appear to be tapering off.

Hong Kong's Hang Seng index rose 0.5% Wednesday, while the tech-heavy Shenzhen Composite added 2.4% — helped by talk of new economic stimulus. Japan's Nikkei index gained almost 0.6%.

The picture is less sunny in Europe, where the Stoxx 600 index is down about 0.1%. Britain's FTSE 100 is up 0.2%. Markets in Germany are lower despite strong first quarter GDP growth.

US stock futures are pointing down, too. The Dow is set to drop about 20 points, or 0.1%, when markets open. The S&P 500 is pacing for a similar decline. The Nasdaq could open flat.

Such calm would follow a rough week for US markets, which recovered on Tuesday from big sell-offs. The Dow closed up more than 200 points, or 0.8%. The S&P 500 was up 0.8%, and the Nasdaq was up 1.1%.

3. Retail sales: The Census Bureau will release its US retail sales report for April at 8:30 a.m. ET.

The retail industry is turning into a tale of the haves and the have-nots. While Walmart, Amazon and Kohl's have adapted well to quickly changing consumer demands, others like JCPenney and Sears are falling short.

People are still buying stuff, though — they're just buying in different ways and at different places. Economists surveyed by Refinitiv expect retail sales rose 0.2% last month.

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4. Companies: Alibaba, Tencent and Macy's will release earnings before the US open Wednesday.

Disney on Tuesday revealed that it will take full control of streaming service Hulu. Shares rose 1.4% and are poised to keep gaining Wednesday.

5. Coming this week:Wednesday — Alibaba, Tencent and Macy's earnings; US April retail salesThursday — Walmart, Baidu and NVIDIA earnings; VivaTech conference starts in ParisFriday — US consumer sentiment