Wall Street could continue to meander Wednesday as investors digest the recent rally and eye oil prices in the lull before earnings season gets into full swing.
"Earnings season is about to begin. (It's) really quiet in what expectations are going to be. The stock market, a lot of it is driven by earnings or expectations of earnings," said Jeff Carbone, co-founder and managing partner at Cornerstone Financial Partners.
PepsiCo gave some investors hope of a positive earnings season with results that beat on both the top and bottom line. The firm also raised its full-year forecast.
However, after the close YUM Brands showed a slower-than-expected recovery in its key China division, with same-store sales in the region rising 2 percent versus the forecast 9.6 percent.
Stocks closed mixed Tuesday, with the Dow Jones industrial average eking out its first three-day winning streak since Aug. 17. The S&P 500 closed 7 points lower at 1,979.92, ending five straight days of gains.
Biotechs continued to weigh on the Nasdaq, which closed down about 0.7 percent at 4,748.36. The iShares Nasdaq Biotechnology ETF (IBB) closed down 3.6 percent for a second day of losses.
The major averages remained within 10 percent of their 52-week highs, or out of correction territory, and are up about 3 percent for the month so far.
Market technician Ryan Detrick noted that the first three trading days of this month were the best start to October in 77 years.
"What I find worthwhile is the previous eight times a month started off up 3 percent after three days, the rest of the month was higher seven times," he said . "In other words, this momentum to kick off the month could stick around."
Other analysts aren't so confident the bottom is completely in.
John Caruso, senior market strategist at RJO Futures, said Tuesday's trade was directionless and could result in the S&P 500 falling back to 1,925 in the near future.
"[We're] moving back towards that swing high of Sept. 7, getting back to the top end of the range," he said. "I wouldn't chase this rally. I think the market's going to run out of steam here."
The S&P failed to close higher despite a 2.2 percent gain in energy on the back of a surge in oil prices. Crude jumped 4.9 percent to settle at $48.53 a barrel, its highest settle since Aug. 31 and its best day since Sept. 21.
Weekly oil inventories, out at 10:30 a.m. ET, could add further support to hopes that supplies are starting to come down.
Wall Street will also eye central bank news in the next few days. The Bank of Japan is scheduled to conclude its two-day meeting Wednesday, or late Tuesday night Eastern Time.
"The fact that the Fed (held off) and the nonfarm payrolls was weak increased expectations that the Bank of Japan and the European Central Bank will do something in October," said Athanasios Vamvakidis, head of G10 FX strategy in Europe for Bank of America Merrill Lynch.
He noted markets will eye the overnight statement for indications on what the Bank of Japan might say in its prospectus and outlook for the economy at its more important meeting on Oct. 30.
The European Central Bank is scheduled to hold a monetary policy meeting in Malta on Oct. 22.
After the close Friday, San Francisco Fed President John Williams reiterated in prepared remarks his view that an interest rate hike would be appropriate later this year.
"Generally the market is about to see some policy consistency from the Fed," said Eric Stein, co-director of global fixed income at Eaton Vance Management. "I think if anything it could be constructive for markets. Not going to change much. I don't think this particularly commentary is going to change anything."
No Fed speakers are scheduled to speak Wednesday ahead of the FOMC meeting minutes out Thursday afternoon ET.
"It all stems on Fed on Thursday, how did each individual member vote?" said John Caruso, senior market strategist at RJO Futures. "It's kind of a situation like the Fed is talking tough, like they're going to raise, but the data (doesn't support it). I don't think the Fed has the audacity to raise rates."
Weekly mortgage applications are scheduled for 7:00 a.m., ET Wednesday. The Treasury will hold a 10-year note auction at 1:00 p.m.