"Earlier spike/bounce may have been a creature of the thin markets. Early nibbling bio-techs and techs began to lift the Russell . When the S&P tried to follow, a 'normal sized' order had the effect of a fat finger type trade," Cashin said. "The move back south came when WTI threatened to break below $47."
Dow-component Pfizer agreed to buy U.S. drug company Medivation for $81.50 a share, or about $14 billion. Shares of Medivation rose 19.74 percent, while Pfizer's stock ended 0.4 percent lower.
"It seems like it's a pretty slow news cycle other than some deals in biotech," said Mike Bailey, director of research at FBB Capital Partners. "You hate to bring a little bit of bad luck, but it does feel like last year when you had the calm before the storm."
Stocks posted new record highs last week, despite the S&P notching its 30th straight session without a 1 percent move on a closing basis, its longest streak since 2014.
"It's good to see the market sit tight here," said Adam Sarhan, CEO at Sarhan Capital. "It shows the market is taking a pause to set up for the next move higher."
Fed Chair Janet Yellen is scheduled to deliver a speech Friday on the U.S. economy and monetary policy at the Economic Policy Symposium at Jackson Hole, Wyoming.
Yellen's remarks will be delivered following hawkish rhetoric from Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley.
Dow Jones industrial average intradaySource: Factset
"Now we don't know for sure if Mr. Dudley and Mr. Fischer alerted Mrs. Yellen to the content of their thoughts before they expressed them or if she even agrees with them but if Yellen concurs on Friday, the short term rate markets will have to adjust, along with many other markets, especially the brain washed equity markets," said Peter Boockvar, chief market analyst at The Lindsey Group.
Market expectations for a September rate hike were just 18 percent, according to the CME Group's FedWatch tool. However, expectations for a December hike were near 50 percent.
"This has been the Fed's MO: The [talk up a rate hike] and then they back off. I expect the same from Janet Yellen," said Sarhan.
Yellen's speech "may come off as a bit hawkish because she'll talk positively about the economy," said Jeremy Klein, chief market strategist at FBN Securities. He added, however, she would probably reiterate that the Fed remains dependent on economic data when assessing its next monetary policy move.
"I think we're in a wait-and-see mode until 11 a.m. Friday," aid Art Hogan, chief market strategist at Wunderlich Securities. "This is the third week in a row we've been in wait-and-see mode," he said, noting last week investors were waiting for the Fed minutes and for retail sales data the week before amid a lack of catalysts.
Meanwhile, in oil markets, U.S. crude dropped 3.03 percent to settle at $47.05 a barrel, as analysts cast doubt the upcoming producer talks would lead to a curtailing oversupply.
There are no major economic data reports due Monday, but the second read on second-quarter GDP is scheduled for release Friday.
U.S. Treasurys traded higher, with the two-year note yield holding around 0.74 percent and the benchmark 10-year yield near 1.54 percent. The dollar was flat against a basket of currencies, with the euro near $1.132 and the yen near 100.27.
In Europe, stocks traded mixed, with the Stoxx 600 index gaining 0.09 percent. In Asia, stocks closed mostly lower, with the Shanghai composite slipping 0.75 percent and the Nikkei 225 gaining 0.32 percent.