Goldman Sachs became the latest bank to downgrade China's growth outlook, saying tighter financial conditions are a downside risk for the world's second largest economy. The bank cut China's gross domestic product growth forecast for the second quarter to 7.5 percent on the year, down from 7.8 percent.
Meanwhile, jitters over prospects that the Federal Reserve could start paring back on its easy-money policy later this year pushed stocks lower and Treasury yields to their highest levels in nearly two years. Last week, major averages logged their worst weekly drop since mid-April.
Furthermore, the Bank for International Settlements (BIS) waved a red flag for central banks over the weekend, saying it was time to end ultra-lose monetary policy. BIS — known as the central bank for central banks — said in its annual report that current monetary policy in the U.S., euro zone, U.K. and Japan will not bring about much-needed labor and product market reforms, and is a recipe for failure.
No major economic reports are scheduled for release Monday. Dallas Federal Reserve President Richard Fisher, a voting member of the Federal Open Market Committee next year, is expected to give a speech on U.S. monetary policy later this afternoon.
On the M&A front, Vodafone agreed to buy Germany's largest cable operator Kabel Deutschland for 7.7 billion euros ($10 billion), trumping an offer from John Malone's Liberty Global.
And Tenet Healthcare said it is acquiring Vanguard Health Systems in a deal worth nearly $4.3 billion, including debt, in an effort to expand into new geographies.
Apple stocks may be closely watched, as the technology giant announced late on Friday that it had changed the way senior executives, including CEO Tim Cook, will receive stock awards. From now on, the award size will depend on stock market performance.
(Read More: Apple's New Pay Plan: Good or Bad?)
Meanwhile, U.S. crude oil prices could fall further this week, having sunk 3 percent last Thursday after Fed Chairman Ben Bernanke's news conference. A majority of analysts in a CNBC poll forecast prices would ease further this week.