Absent another campaign shocker, stocks could continue to trade hesitantly, paralyzed by uncertainty ahead of the election.
There is some key data Tuesday, including October auto sales and manufacturing data. ISM manufacturing and construction spending are expected at 10 a.m. EDT, while Markit PMI is expected at 9:45 a.m. The Fed on Tuesday also begins its two-day meeting, where it is not expected to raise interest rates but could signal its intent to hike in December.
The S&P 500 on Monday was flat, slipping just 0.2 of a point to 2,126. It declined nearly 2 percent for the month of October, the worst month since January.
Julian Emanuel, equity and derivative strategist at UBS, said contentious elections — especially when there's a third-party candidate — have historically been a recipe for a wobbly stock market.
"When the election is as contentious as this one has been with so much back and forth, and the prevalence of the third-party candidate, what our work has shown is the market has tended to trade very indecisively the month before and several months after," he said.
This year, Gary Johnson is running as the Libertarian party nominee and he is seen as having 5 percent of the popular vote, according to FiveThirtyEight.com.
The market Monday continued to digest Friday's news of further investigation into Democrat Hillary Clinton's email issues by the FBI. Clinton continues to hold a lead over Trump, but some stock strategists said there is a cloud over her that could impact her effectiveness if she becomes president.
The latest NBC/Survey Monkey poll showed no change in Hillary Clinton's six-point national lead over Republican Donald Trump, after the latest revelations about the FBI investigation.
"The fact [stocks are] holding up here in the face of this suggests the uncertainty out there, and we're going to have to wait until we get closer to Election Day. It's impossible to know. My gut is ... it's pretty close," said Bruce Bittles, Baird chief investment strategist.
Daniel Clifton, chief policy strategist at Strategas, said the fallout from news of the latest investigation into Clinton may be that Democrats don't do as well as they might have in down-ballot races.
Wall Street has viewed Clinton as a favorite and was comfortable with a Democratic White House if Congress remains in Republican hands, a recipe for gridlock. Trump is seen as more of an unknown, although his tax proposals are more appealing to market participants.
Clifton said one metric he follows has turned out to be a potential positive for Donald Trump, if history is a guide. The market is down 2.5 percent since Aug. 8 and unless it reverses course by Election Day, it could be a bad omen for Clinton. Going back to 1984, the incumbent party has never won the White House when the market has performed negatively, he said.