* Tech leads Wall Street lower
* China May industrial production growth at 17-year low
* European stocks suffer biggest fall in two weeks
* Crude prices edge higher on Gulf of Oman tensions (Updates to late afternoon)
By Stephen Culp
NEW YORK, June 14 (Reuters) - Equity markets lost ground on Friday as weak Chinese data stoked investor anxieties over a global growth slowdown and mounting fears of a U.S.-Iran confrontation added to geopolitical uncertainty, sending oil prices higher.
However, positive U.S. retail sales data helped boost the dollar and short-term Treasury yields.
Attacks on two oil tankers in the Gulf of Oman lifted oil prices, although they remained on track for a weekly loss on worries a sluggish world economy could hurt demand.
China's industrial output growth came in well below expectations, slowing to a more than 17-year low, suggesting Beijing was feeling the sting of the protracted trade war with the United States.
"The China data certainly is far-reaching, impacting not only China but global markets as well," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "That is one of the big overhangs today."
"The other one is what's happening in the Persian Gulf, which could turn into a military response versus a peaceful response," Ghriskey added. "There's still a lot of uncertainty."
A warning of a broad slowdown in chip demand from chipmaker Broadcom Inc underscored the effects of the U.S.-China tariff dispute, dragging on European as well as U.S. equity indexes.
The Dow Jones Industrial Average fell 12.76 points, or 0.05%, to 26,094.01, the S&P 500 lost 4.51 points, or 0.16%, to 2,887.13 and the Nasdaq Composite dropped 35.78 points, or 0.46%, to 7,801.35.
MSCI's broad gauge of stocks across the globe shed 0.33%, while the pan-European STOXX 600 index lost 0.40%.
The Federal Reserve is set to hold its two-day monetary policy meeting June 18-19, with investors closely watching its outcome for clarity on when or whether to expect a near-term rate cut.
A Reuters poll showed a growing number of economists expect the Fed to cut interest rates this year, although the majority still see it holding steady.
"The Fed could surprise us and cut rates," added Ghriskey. "I wouldn't put it out of the realm of possibility that we could see the Fed ease next week, but right now the futures aren't anticipating that."
Growing worries about a new U.S.-Iranian confrontation set crude prices higher, U.S. crude settling up 0.44% at $52.51 per barrel, with Brent futures gaining 1.1% to $62.01 per barrel.
The dollar index climbed to its highest in almost two weeks on Friday after the encouraging retail sales data for May eased fears that the U.S. economy is slowing sharply.
The dollar index rose 0.57%, with the euro down 0.59% to $1.1209.
The retail data also sent short-dated U.S. Treasury yields higher, flattening the yield curve and diminishing expectations for a Fed rate cut in June.
Benchmark 10-year notes last fell 1/32 in price to yield 2.0942%, from 2.091% late on Thursday.
Gold turned negative after hitting a 14-month peak earlier in the session.
Spot gold dropped 0.1% to $1,340.16 an ounce.
Reporting by Stephen Culp; Additional reporting by Kate Duguid, Ahmad Ghaddar, Karen Brettell, Karin Strohecker, Sujata Rao and Dhara Ranasinghe in London and Shinichi Saoshiro in Tokyo; Graphic by Saikat Chatterjee Editing by Nick Zieminski