U.S. equities closed mostly flat on Monday after a choppy session, with telecommunications lagging, as investors geared up for two key central bank meetings.
The Dow Jones industrial average briefly rose more than 100 points before closing about 5 points lower, with Apple contributing the most losses.
"This is a wait-and-see week," said Art Hogan, chief market strategist at Wunderlich Securities. "To follow through, you're going to need some clarity from the Fed and the BOJ." "I think the lift-off we got was some capitulation on oil not going below $30 [last week]."
U.S. crude prices rose 0.63 percent to settle at $43.30 per barrel, after gaining more than 2 percent, as Venezuela President Nicolas Maduro said that a deal could be announced this month to stabilize oil markets, which have come under pressure due to a persistent glut and a price collapse over the past two years. "Seems like the market is following that," said JJ Kinahan, chief strategist at TD Ameritrade.
"That's taken all the oomph out of the market," said Art Cashin, director of floor operations at UBS. "The dollar is weak but the interest rates snuck up a little bit but the market is ignoring it. It was 110 percent about oil today."
The S&P 500 closed flat, with telecommunications falling about 0.7 percent and with real estate kicking off its first day as a sector in the index.
"Attention will inevitably be on Wednesday with two major central banks set to announce their latest policy decisions," Craig Erlam, senior market analyst at Oanda, said in a note to clients. "It doesn't help that we're lacking any notable economic data or events today and tomorrow isn't looking much more thrilling. That said, markets are looking spritely with a heavy dollar and commodity gains sparking some life into what could otherwise have been a fairly slow day. The softening in the dollar comes following some strong gains on Friday on the back of stronger CPI inflation numbers."
The Nasdaq composite ended 0.18 percent lower as Apple fell 1.17 percent. Earlier in the session, the three major indexes traded in negative territory.
The U.S. Federal Reserve and the Bank of Japan are both scheduled to deliver their latest decision in monetary policy Wednesday. Market expectations for a Fed rate hike this week were relatively low. That said, expectations for a December rate hike are roughly 50 percent.
"There's more expectation that the Fed will hold, but it will be a more hawkish hold," said Quincy Krosby, market strategist at Prudential Financial. "If [Fed Chair Janet Yellen] wants to guide the market for December, she's going to have to be more targeted ... rather than her plain statement of being data dependent.
The BOJ, meanwhile, is expected to take some action, as speculation points to a possible rate cut deeper into negative territory.
"I think we all know the past BOJ past policies haven't worked. I don't think the market would be too thrilled to get more of something that hasn't worked," said Maris Ogg, president at Tower Bridge Advisors.
U.S. futures rose sharply on Monday, with Dow futures advancing nearly 80 points, while S&P and Nasdaq futures gained 9 points and 13 points, respectively.
"I think the market is getting used to the idea that the Fed doesn't do anything this meeting," Tower Bridge's Ogg said.
This week's data calendar is a light one, but Tower Bridge's Ogg and Prudential's Krosby said investors should keep an eye on the housing data that's due. The latest read on the Housing Market Index showed homebuilder sentiment spiked to its highest level in nearly a year. Later this week, housing starts, existing home sales and the FHFA Home Price Index.
"Janet Yellen doesn't want to say anything that'at would derail the housing recovery," said Krosby. "I think there's a probability that housing continues to get better. There's a lot of positive consequences that come from that," Ogg said.
U.S. Treasurys fell Monday, with the two-year note yield near 0.77 percent and the benchmark 10-year yield around 1.7 percent. The dollar fell against a basket of currencies, with the euro near $1.118 and the yen around 101.8.
Major U.S. Indexes
The Dow Jones industrial average fell 3.63 points, or 0.02 percent, to close at 18,120.17, with 3M leading advancers and Intel the top decliner.
The fell less than a point to close at 2,139012, with telecommunications leading decliners and utilities the top riser.
The Nasdaq fell 9.54 points, or 0.18 percent, to end at 5,235.03.
About two stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 763.58 million and a composite volume of 3.081 billion in at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 15.3.
Gold futures for December delivery settled $7.60 higher at $1,317.80 per ounce.
—CNBC's Patti Domm and Reuters contributed to this report.
On tap this week:
*Planner subject to change.
Monday
Earnings: Ascena Retail
Tuesday
2-day FOMC meeting begins
Earnings: Lennar, FedEx, KB Home, Adobe Systems
8:30 a.m. Housing starts
8:30 a.m. Building permits
Wednesday
Earnings: General Mills, Red Hat, CarMax, Bed Bath & Beyond
2 p.m. FOMC meeting statement and economic projections
2:30 p.m. Fed Chair Janet Yellen press conference
Thursday
Earnings: AutoZone, Rite Aid
8:30 a.m. Initial claims
9 a.m. FHFA home prices
10 a.m. Existing home sales
10 a.m. Leading index
Friday
Earnings: Finish Line
9:45 a.m. Manufacturing PMI
12 p.m. Philadelphia Fed President Patrick Harker, Atlanta Fed President Dennis Lockhart and Cleveland Fed President Loretta Mester on reinventing communities, transforming economies
12:30 p.m. Dallas Fed President Rob Kaplan speaks at energy forum