DOW MINI FUTURES, S&P FUTURES LIMIT DOWN

U.S. stock index futures screamed lower on Monday, with Dow futures tumbling more than 700 points, as fears surrounding the health of China's economy multiplied.

The New York Stock Exchange is invoking Rule 48 for the Monday stock market open, Dow Jones reported.

The rule allows NYSE to open stocks without indications. "It was set up for situations like this," said Art Hogan, chief market strategist at Wunderich Securities.

Before this week, Rule 48 was most recently invoked in January 2015. In all, Rule 48 has been invoked 67 times since it was approved in 2007, according to an NYSE spokeswoman. The goal of the rule is to ease market volatility.

The Dow futures held about 700 points lower, with the S&P futures off about 80 points, and the Nasdaq 100 futures off about 5 percent, which marks the lower end of the price limit.

The major averages are on track for one of their worst opens since the financial crisis of 2008.

These concerns saw the benchmark Shanghai Composite index notch up its biggest one-day percentage loss since 2007 on Monday, closing down 8.5 percent.

Read MoreFive charts that prove this selloff is serious

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

Panic spread to European markets, with the STOXX Europe 600 off more than 4.5 percent. All major bourses were off a similar amount. The FTSEurofirst 300 index traded down over 4.6 percent and was on course for its worst month since 2008, having shed more than $1 trillion in market value in August so far.

Japan's Nikkei 225 index also finished at its lowest closing level since February 23, as a double whammy of China-related fears and a rejuvenated yen brought the bourse down by its biggest one-day drop in more than 2 years.

Read MoreWeek ahead: Markets seek clarity from China, Fed

The major falls come after U.S. stocks closed deep in the red on Friday, pushing the Dow and Nasdaq into correction territory.The major averages had their biggest trade volume day of the year and posted their worst week in four years.

Oil prices crashed to fresh six and half year lows on Monday, after Chinese stock markets suffered, intensifying worries over the outlook for global oil demand.

Brent oil was trading down 4.6 percent, at $43.36 a barrel. U.S. October crude was down 4.1 percent at $38.80 a barrel

"Markets are afraid of further economic weakness in China, further pain in global commodity markets and uncertain about Fed and People's Bank of China policy—what they will do and what the impact will be," said global strategist at Societe Generale, Kit Juckes.

"The divergence between global commodity prices and equities is not a new theme but the danger now is that they begin to re-correlate—as they did when the dotcom bubble burst in 2000 and what had previously been an emerging market crisis became a U.S. recession."

No major earnings or economic data are expected from the U.S. on Monday.

While traders will be pre-occupied with the extreme moves in global markets, elsewhere the coming week's annual Economic Policy Symposium at Jackson Hole, which brings together academics, financial market participants and many of the world's leading central bankers, could provide important signals as to near-term monetary policy action in the U.S.

In addition, Federal Reserve Vice-Chairman Stanley Fischer will speak later this week.

Thursday will brings this week's data highlight, with the second reading of second quarter gross domestic product (GDP).

Some important housing data is also due for release throughout the week, including the release on Tuesday of the FHFA and Case-Shiller home price indices and new home sales figures, followed on Thursday by pending home sales data.

Meanwhile, safe haven assets have rallied around the world, with gold and U.S. Treasurys both seeing strong gains in the last two weeks.

Read More Early movers: GAS, CMG, ANF, BAC, ANF, BMY & more

In currency markets, the yen and Swiss Franc have rallied against the U.S. dollar while the euro has proved the surprise outperformer, appreciating 4.5 percent against the greenback in the last two weeks.

Correction: This story has been updated to reflect that Rule 48 was last invoked in January 2015, not during the financial crisis, according to NYSE.