U.S. stocks closed off session lows Monday as traders anticipated an interest rate hike on Wednesday.
The S&P 500 closed nearly 1 point higher in its third straight day of gains. Materials stocks led advancers, while health care fell 0.15 percent as the worst decliner.
Art Hogan, chief market strategist at Wunderlich Securities, attributed the decline in health care stocks to "uncertainty over 'repeal and replace.'" The Congressional Budget Office is expected to reveal, as early as Monday, an estimate of how many people would have health insurance coverage under a Republican proposal.
The Nasdaq composite closed slightly higher, helped by gains in NVIDIA, Sirius XM Holdings and Facebook. The Dow Jones industrial average closed about 21 points lower with IBM having the greatest negative impact.
Intel also contributed to the Dow's losses. Shares of the chipmaker fell nearly 2.1 percent after announcing it will buy Israeli driverless technology firm Mobileye for $15.3 billion. Mobileye shares leaped 28.2 percent.
Energy stocks held mostly steady despite continued declines in oil prices. Crude hit an intraday low of $47.90 a barrel, its lowest since Nov. 30, and WTI futures for April delivery settled down 9 cents, or 0.19 percent, at $48.40 a barrel.
The Federal Open Market Committee is set to raise rates at the conclusion of its two-day meeting on Wednesday. Traders generally expect the Fed to hike three times this year, after the central bank raised rates in December for the second time in just about a decade.
The financial sector gave up most of its earlier gains to close 0.05 percent higher.
"The whole Fed tightening theme is a considerable positive for the larger depositories, the larger banks," said Tom Wright, director of equities at JMP Securities. "We continue to see generalist money moving into large-cap financials."
"The one thing that is the variable on Wednesday is the commentary and the language," Wright said. "If the language were to indicate something more aggressive from the Fed, that could cause a reaction in the markets."
Treasury yields edged higher. The rate-sensitive was a touch below seven-year highs around 1.38 percent, while the benchmark 10-year yield traded near 2.61 percent.
"The Fed is fully in focus," said Jeremy Klein, chief market strategist at FBN Securities. He's also watching oil prices and any developments ahead of the Dutch general election, scheduled for Wednesday.
The vote is the first of three key European elections this year, which have highlighted a growing nationalist, anti-EU voice in the euro zone. In the Netherlands, populist party leader Geert Wilders is campaigning for greater control of parliament versus the more moderate Dutch Prime Minister Mark Rutte.
The U.S. dollar index traded little changed near a touch higher near 101.4, with the euro around $1.066 and the yen near 114.8 yen.
Gold settled higher for the first time in 10 days. Futures for April delivery rose $1.70 to $1,203.1 an ounce.
U.S. stocks closed slightly higher Friday after a better-than-expected jobs report, but the Dow and S&P 500 still posted their worst week of the year so far. Last week, U.S. crude oil prices plunged below the psychologically key $50 level after a jump in crude inventories.
Overseas, European stocks ended slightly higher, with the STOXX Europe 600 about 0.4 percent higher.
The Shanghai composite gained nearly 0.8 percent, while the Hang Seng closed up 1.11 percent. The Nikkei 225 gained 0.15 percent.
The S&P 500 closed up 0.87 points, or 0.04 percent, at 2,373.47. Materials led eight sectors higher and health care was the greatest decliner.
The Nasdaq composite closed up 14.06 points, or 0.24 percent, at 5,875.78.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, reversed earlier gains to trade lower near 11.4.
About three stocks advanced for every two decliners on the New York Stock Exchange, with an exchange volume of 737 million and a composite volume of nearly 3.1 billion in the close.
— Reuters contributed to this report.
On tap this week:
Earnings: Volkswagen, DSW, HD Supply
Two-day Fed meeting begins
6:00 a.m. NFIB
8:30 a.m. PPI
Earnings: Oracle, Guess, Jabil Circuits
8:30 a.m. Retail sales
8:30 a.m. CPI
8:30 a.m. Empire state survey
10:00 a.m. Business inventories
10:00 a.m. NAHB survey
2:00 p.m. FOMC statement, economic projections
2:30 p.m. Fed Chair Janet Yellen briefing
Earnings: Adobe Systems, Dollar General, JA Solar, Vivant Solar
8:30 a.m. Jobless claims
8:30 a.m. Housing starts
8:30 a.m. Building permits
8:30 a.m. Philadelphia Fed survey
10:00 a.m. JOLTS
9:15 a.m. Industrial production
9:15 a.m. Capacity utilization
10:00 a.m. Consumer sentiment
*Calendar subject to change.