Wall Street's focus will be squarely on the Federal Reserve's interest-rate decision this week after weak jobs data raised questions about the pace of future hikes, while concerns about oil prices near $45 a barrel are likely to keep US stocks under pressure.
Earnings releases will slow to a trickle as the second-quarter reporting season comes to a close. But a few key companies are still set to report, such as Cisco Systems and Wal-Mart Stores Inc.
The economy will get most of the attention, with the center-point of the week the Federal Reserve's interest-rate decision on Tuesday. Retail sales data for July on Thursday and the University of Michigan's August consumer sentiment survey on Friday also will be eyed.
However, analysts see little relief from the market's current malaise, as investors fret about oil prices at 21-year highs, geopolitical worries and the economy losing steam.
US stocks closed at the lowest levels of the year on Friday after weaker-than-expected data from the July jobs report stirred investors' fears that the US economic recovery may be weak.
For the week, the Dow Jones industrial average fell 3 percent, closing on Friday at 9,815.33, while the Standard & Poor's 500 Index also dropped 3 percent, ending at 1,063.97. The tech-heavy Nasdaq sank 6 percent during the week, finishing Friday's session at 1,776.89.
Despite this, Fed officials are still expected to add to June's quarter-point increase in interest rates and hike its fed funds rate target by another quarter percentage point to 1.5 percent on Tuesday afternoon, in order to ward off longer-term inflationary pressures.
While Friday's disappointing July jobs data made a rate increase less of a done deal, analysts think the main gray area is about the pace of rate hikes in the future.
The uncertainty means Wall Street will be scrutinising the Fed's statement, which in June said rate rises should be at a "measured" pace.
Rising interest rates are generally bad news for stocks because of the impact on companies' borrowing costs and consumer spending. A full 1 percent rate increase would translate into an additional $3.1 billion pre-tax expenditure by S&P 500 companies, according to Howard Silverblatt, market equity analyst at Standard & Poor's.
While rising interest rates are a dampener, investors are more worried by stubbornly high oil prices. US crude futures hit historic peaks last week - rising as high as $44.77 a barrel before settling at $43.95. That leap near $45 took the price of US crude to its highest in the 21 years that oil futures have been traded on the New York Mercantile Exchange.
Crude oil is a factor in almost every aspect of production and transportation of goods and services, and affects the profits of almost all companies. As a consequence, stocks have closely mirrored the change in crude oil futures, with the stock market falling when oil futures rise.
Earnings will take a back seat to economic and political news as the second-quarter reporting season winds down. But investors will be seeking further clues on the strength of consumer and business demand on Tuesday from Cisco's earnings and on Thursday, when Dell Inc and Wal-Mart report results.
However, analysts are sceptical about whether earnings can help pull the market out of its malaise.
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