Here are the most important news, trends and analysis that investors need to start their trading day:
1. Dow set to bounce after its worst weekly loss since October
Dow futures bounced about 200 points Monday after the 30-stock average posted its worst weekly loss since October as investors and traders sold on concern that the Federal Reserve could start increasing interest rates sooner than expected. The Dow on Friday lost 533 points, or nearly 1.6%, closing out a five session losing streak of almost 3.5%. The S&P 500, which fell 1.3% on Friday, sank four days in row for a 1.9% weekly decline. The Nasdaq dropped less than 1% on Friday but was down only about 0.3% for the week.
The Fed last Wednesday increased its inflation forecast and indicated two rate hikes in 2023. Fed Chairman Jerome Powell said central bankers were considering tapering their massive Covid-era bond purchases. Fed speakers will get a lot of attention this week, including Tuesday's congressional testimony from Powell. The 10-year Treasury yield continued to back away from last week's Fed-driven spike, trading early Monday just above 1.4%. It briefly dipped to 1.354%, the lowest level since late February.
2. Bitcoin drops as China expands crackdown on crypto mining
Bitcoin dropped 7% on Monday, trading under $33,000 for the first time in nearly two weeks, on reports that China's crackdown on cryptocurrency mining extended to the southwestern province of Sichuan. This follows similar developments in China's Inner Mongolia and Yunnan regions, as well as calls from Beijing to stamp out crypto mining due to worries over its massive energy consumption. The Communist Party-backed Global Times estimates that more than 90% of China's bitcoin mining capacity has been shut down.
3. Prime Day begins as retail faces supply-chain disruptions
Amazon's Prime Day kicked off Monday. Prime Day 2020, delayed to October due to the pandemic, pulled in $10.4 billion, according to Digital Commerce 360, a 45% increase from the prior year's two-day event. This year's Prime Day comes as retail industry grapples with widespread global supply-chain disruptions. Several other major retailers — including Walmart, Target, Kohl's, Macy's and Costco — are holding competing sales events this week.
4. American Airlines cancels 100 more flights Monday
As travel demand surges toward pre-pandemic levels, American Airlines canceled 100 more flights Monday after scrapping hundreds over the weekend due to staffing shortages, maintenance and other issues. American said it's trimming its overall schedule by about 1% through mid-July to help ease the strain on its operations. The carrier blamed some of the recent problems on scheduling complications stemming from bad weather at its Charlotte and Dallas/Fort Worth hubs during the first half of June. American is also racing to train all of the pilots it furloughed in between two federal aid packages that prohibited layoffs as well as aviators due for periodic recurrent training.
5. Tokyo Olympics to allow 10,000 local fans in venues
The Tokyo Olympics will allow some local fans to attend the Summer Games when they open in just over a month. Fans from abroad were banned several months ago. Organizers set a limit of 50% of capacity up to a maximum of 10,000 fans for all Olympic venues. The decision contradicts the country's top medical adviser who recommended last week that the safest way to hold the Olympics during the pandemic would be without fans. Japan's prime minister, who has favored allowing fans, said before the official announcement that local fans would be barred if conditions change. The Tokyo Games are set to open on July 23.
Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032.
— CNBC's Leslie Josephs and The Associated Press contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC's coronavirus coverage.