"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.