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China stock tumble, Greece in focus for US stocks

U.S. stock index futures indicated a flat to positive open for Wall Street on Friday, with focus on events abroad following a slide in Chinese stocks and deadlock in talks to avert a debt default in Greece.

European stocks traded broadly lower after talks on Thursday on a cash-for-reforms deal between Greece and its international creditors failed to reach a successful conclusion, with further talks set to take place on Saturday.

Greece is at risk of defaulting on a 1.6 billion euro ($1.8 billion)-debt repayment to the International Monetary Fund on June 30, with Greece's bailout program also set to expire at the end of the month.

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"I expect to see significant risk aversion... with investors preparing for fireworks over the weekend," said Craig Erlam, senior market analyst at OANDA, in a note.

Traders work on the floor of the New York Stock Exchange.
Getty Images
Traders work on the floor of the New York Stock Exchange.

"The rhetoric coming from both camps over the last couple of days doesn't make for nice reading and many people will be preparing for the worst-case scenario if both sides refuse to back down on key issues, most notably pensions, and accept the consequences," he said.

U.S. stock futures edged higher over the course of early trade in Europe, with Dow Jones industrial average futures up almost 30 points.

China could be in the spotlight on Wall Street on Friday after the benchmark Shanghai Composite stock index closed down 7.4 percent, in its biggest one-day percentage fall in five months.

New listings have dented the stock market, while gains of over 100 percent over the past year have triggered a debate over whether a bubble in Chinese shares is now bursting.

In the United States, investors will watch the final reading of the Michigan sentiment index, due out at 10:00 a.m. ET.

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"The trend of economic data from the U.S. has turned distinctly positive recently, so Friday's University of Michigan consumer sentiment report may give the dollar a jolt higher if it can also come in above expectations," Jasper Lawler, a market analyst at CMC Markets, said in a note.

Finish Line reports earnings before the bell.

Wall Street shares fell on Thursday as a lack of progress to resolve the Greek crisis weighed on investor sentiment.

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The Russell 2000 annual rebalancing takes place today.