Stocks fell slightly on Monday as investors looked ahead to U.S.-China trade talks, which are set to begin later this week.
The Dow Jones Industrial Average was down 95.70 points, or 0.4% at 26,478.02. The S&P 500 dipped 0.5% to 2,938.79 while the Nasdaq Composite lost 0.3% to close at 7,956.29. The indexes alternated between slight gains and losses for most of the session before ultimately closing lower.
"Any real change or breakthrough is unlikely, but positive talks are going to be a catalyst for the market," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. He noted this week will also give investors clues about the market heading into year-end.
A report suggested Chinese officials were increasingly reluctant to agree to a broad trade deal pursued by President Donald Trump.
Vice Premier Liu He, who will lead negotiations for China, told dignitaries that his offer to the U.S. will not include commitments on reforming Chinese industrial policy or government subsidies, Bloomberg reported Sunday, citing sources familiar with the matter.
Trade talks between the U.S. and China are set to resume in Washington, D.C., on Thursday. Deputy-level talks kicked off on Monday.
The world's two largest economies have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
Wall Street came into Monday's session after the Dow and S&P 500 posted their third straight weekly decline after a flurry of disappointing U.S. economic data suggested the ongoing trade war was starting to take its toll, stoking concerns of a possible recession.
The Institute for Supply Management said last week U.S. manufacturing activity fell to its lowest level in a decade in September while the services sector grew at its slowest pace in more than three years.
The Dow fell 0.9% last week while the S&P 500 slid 0.3%.
However, that weak data also raised hope for easier monetary policy from the Federal Reserve. Market expectations for a rate cut later this month were around 80%, according to the CME Group's FedWatch tool.
"The silver lining to last week's disappointing economic data appeared to be twofold as it 1) materially increased the probabilities for further FOMC interest rate cuts and 2) also increased the pressure on the U.S. and China to work toward a timely trade resolution," said Craig Johnson, chief market technician at Piper Jaffray, in a note.
In corporate news, ConocoPhillips rose more than 2% after the company raised its quarterly dividend by 37.7% to 42 cents per share. The stock was among the best performers in the S&P 500.
Uber Technologies climbed more than 2% after an analyst at Citigroup upgraded the ride-sharing service to buy from neutral, citing a favorable "risk/reward" outlook.
—CNBC's Sam Meredith contributed to this report.