"The across-the-board deceleration in July exceeded our expectations," analysts at Barclays wrote in a note to clients following the report. They noted, however, that the generally downbeat data may spark policy action from Beijing. 

"We think policymakers may be more inclined to stabilise growth owing to concerns about job losses," they wrote. "An imminent monetary policy move, such as rate cuts, cannot be ruled out."

On the U.S. front, the Labor Department reported import prices fell 0.6% in July,  the fourth straight month of declines. Export prices ticked up 0.5% last month, more than analysts expected. On a year-to-year basis, import prices were down 3.2% in the steepest monthly decline since October 2009. Export prices fell 1.2% on the same basis. 

In corporate news, shares of J.C. Penney (NYSE:JCP) tumbled and then rebounded as analysts made sense of a bigger-than-expected quarterly loss.