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US stocks eye China slide, earnings

U.S. stock markets are expected to open lower on Monday, hurt by a sharp selloff in Chinese stocks with earnings reports, data and this week's meeting of the U.S. Federal Reserve also in focus.

This session sees earnings from Norfolk Southern, Ryanair, Luxottica and Baidu. Meanwhile, June durable goods data showed an increase of 3.4 percent, beating expectations slightly.

Ian Waldie | Getty Images News | Getty Images

A more-than 8 percent dive in China's benchmark Shanghai Composite index, meanwhile, could exacerbate fears about a slowdown in the Chinese economy.

The slide in Chinese stocks, hurt by Friday's weak PMI data for the country and a selloff in commodities, set the tone for trade in global stocks. Asian shares ended the day in negative territory, while European shares were broadly lower.

U.S. stock index futures gave up early gains to trade lower, with Dow Jones industrial average futures down more than 100 points.

"It could be a very interesting week for the markets, dominated by the Federal Reserve meeting on Tuesday and Wednesday that could determine how the markets trade over the next couple of months," Craig Erlam, senior market analyst at currency trading firm OANDA, said in a note.

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"Corporate earnings will also remain a big focus this week, especially as they could be the last set of results we get before the Fed hikes interest rates," he added.

The Fed is not expected to make any changes to monetary policy when it concludes a two-day meeting on Wednesday, although markets are anticipating a rate hike at the September meeting.

A rout in commodities, which could dampen inflation further and slow the Fed's path to raising interest rates, was expected to remain in focus.

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The Thomson Reuters CRB commodities index on Monday hit its lowest level in six years, while U.S. oil prices remained below $50 a barrel and gold prices held above 5-1/2 year lows.