They are both correct, but they have slightly different meanings.
He's walking slowly. (Right now, you see him walking slowly.)
He walks slowly. (In walks slowly in general, but not necessarily now.)
For example, if you are talking about a friend who is not here right now:
My friend hurt his knee. He walks slowly. (good)
My friend hurt his knee. He's walking slowly. (wrong, because the friend is not here right now)