"That will keep the market a little uneasy for the next month or two," said Dan Deming, managing director at KKM Financial. "As long as there is no formal resolution that will weigh heavily on the market."
He's watching to see if the S&P 500 can hold the 2,150 level. "A close below 2,150 would have a negative impact on expectations here at least for the next couple days," he said.
U.S. stocks closed slightly lower Monday, with the Dow Jones industrial average falling 54.30 points to 18,253.85, and the S&P 500 down 7.07 points to 2,161.20. The real estate sector lagged, followed by utilities.
Treasury yields climbed, helped by a better-than-expected ISM manufacturing report at 51.5 in September versus 49.4 in August. The U.S. two-year Treasury yield hit 0.802 percent, its highest since September 21, while the U.S. 10-year Treasury yield hit 1.626 percent, its highest since September 23.
"It's moving toward recognition that the Fed may be raising rates in December," Krosby said, adding that "we have a ways to go" before then, including the jobs report.
Friday's scheduled release on September employment is the key data for the week. Ahead of that time, no major data is scheduled for Tuesday release and traders will eye two U.S. Federal Reserve speakers for indications on the likelihood of a December interest rate hike.
Richmond Fed President Jeffrey Lacker is scheduled to speak on the economic outlook at 8:05 a.m., ET, while Chicago Fed President Charles Evans is set to speak at 7:40 p.m., ET, on monetary policy and the economy.
"That's going to keep us busy because everybody's going to hang on every word for something that's not going to happen for three months," said JJ Kinahan, chief strategist at TD Ameritrade.
However, Evans is an alternate member of the Federal Open Market Committee, while Lacker is not a voting member. On Monday, voting member Cleveland Fed President Loretta Mester said on Bloomberg that November would remain a compelling option for raising rates if data were to come in as expected.
The Fed did not raise rates at its September meeting, and most analysts don't expect the central bank to move at its November meeting since it comes just days before the U.S. presidential election and there is no scheduled press conference.