S&P 500 closes flat Monday as traders brace for big earnings, Fed decision later this week

U.S. equities wavered on Monday, as traders braced for the busiest week of corporate earnings, as well as insights into further interest rate hikes from the Federal Reserve.

The Dow Jones Industrial Average climbed 104 points in the last leg of trading, or 0.3%, to 32,004.08. The S&P 500 added 0.1%. The tech-heavy Nasdaq Composite was the laggard, down 1%. All of the major averages are on track for their best month of the year.

Monday kicked off the final week of trading for the month of July — and perhaps the most important week of the summer — with the Fed meeting and GDP data on deck. Almost a third of the S&P 500 are set to report quarterly earnings this week as well, including Apple, Alphabet and Microsoft. Investors are still worried about the potential of an economic recession and are hoping this week's news storm will help reset their expectations.

"Investors likely believe Thursday's GDP report will show a second quarter of decline, which is the unofficial signal of recession," Sam Stovall, chief investment strategist at CFRA Research, told CNBC on Monday. "While the Fed will probably announce a 75-basis-point rate hike on Wednesday, they will offer a more moderate tone towards further rate increases. We see this counter-trend rally continuing in the near term."

Mega cap tech stocks took a hit on Monday on the heels of a warning by Snap, which reported disappointing earnings last week causing investors to worry about declining digital ad spending in the current economic climate. Meta Platforms fell 2.3%. Amazon, Apple, Microsoft and Alphabet all fell about 1%.

Elsewhere, shares of Newmont Corporation slid 12% after the mining company reported a quarterly loss that was down nearly 41% from a year ago, hurt by a drop in gold prices. Philips tumbled 6% after the Dutch medical equipment maker reported weaker-than-expected quarterly earnings, citing lockdowns in China and supply chain issues.

On the flip side, energy stocks were the best performing sector as oil prices rose. Diamondback Energy, Marathon Oil and APA Corp each jumped about 6%. Chevron was the top gainer in the Dow, up 2.7%.

The major averages are going for their third positive week in four. The S&P 500 has been attempting a comeback after falling into a bear market earlier this year. The index is currently up more than 8.5% from its 2022 and trading near the highest levels since early June.

Investors shifted into risk assets last week after absorbing some strong corporate results that had Wall Street deliberating whether the bear market has found a bottom.

"Sometimes you have to remove emotion from markets and focus on the technicals," said Jeff Kilburg, chief investment officer and portfolio manager of Sanctuary Wealth. He noted that he saw the bottom at 3,600 on the S&P, and that the index traded above its 50-day moving average last week.

"Seven percent ago... We had so much emotion, peak inflation, the CPI reading, peak pessimism, downgrades from Morgan Stanley and Bank of America, everyone pulling down their end-of-year targets," he added. "When you see that many people listen to one side of the boat, markets go the other way."