The U.S. benchmark S&P 500 stock index dipped after Goldman Sachs Group and Citigroup Inc both reported quarterly revenue below consensus estimates, though the index pared losses in afternoon trading.
Wall Street's slight drop kept MSCI's gauge of global equities, which has risen more than 14% this year, largely unchanged. It inched up 0.02% after trading in negative territory for much of Monday's session.
"Right now, the market is sitting tight," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "There's not really a reason to be overly aggressive or defensive until we see more earnings."
The U.S. earnings season is being used to gauge the strength of corporate America in the face of major challenges to growth.
While U.S. corporate earnings are widely expected to drop year-over-year for the first quarter, analysts anticipate an increase in revenue. As a result, equity investors will likely follow top-line results closely, said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York.
"People are focusing on the revenue numbers, and they're virtually in line if not slightly disappointing so far," he said.
The Dow Jones Industrial Average fell 27.53 points, or 0.1%, to 26,384.77, the S&P 500 lost 1.83 points, or 0.06%, to 2,905.58 and the Nasdaq Composite dropped 8.15 points, or 0.1 percent, to 7,976.01.
Upbeat news on U.S.-China trade talks cushioned the disappointing revenue reports.
U.S. Treasury Secretary Steven Mnuchin said he hoped the trade talks were approaching a final lap. Reuters reported on Sunday that U.S. negotiators have tempered demands that China curb industrial subsidies as a condition for a trade deal after strong resistance from Beijing.
The trade optimism helped European equities edge upward, with the STOXX 600 closing up 0.15%.
Oil prices, however, fell after Russia's finance minister said Russia and OPEC may decide to boost production given record output from the United States.
Brent crude futures settled at $71.18 a barrel, down 37 cents for a 0.52% loss. U.S. West Texas Intermediate (WTI) crude futures settled at $63.40 a barrel, down 49 cents for a 0.77% loss.
Monday's trading marked a pause after last week's rally, when Brent broke through the $70 threshold and U.S. crude posted six straight weeks of gains for the first time since early 2016.
This week, investors across asset classes will examine data for signs of whether a cooling in the global economy is turning around. The data includes Germany's ZEW survey and Chinese gross domestic product due on Wednesday. U.S. retail sales and housing data, which will give a glimpse into whether the U.S. economy is withstanding the broader slowdown, are also scheduled for release this week.
"Every data release will be monitored and scrutinized by analysts to see if there are stronger underpinnings for the economy," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. "Even if there is an earnings recession, it's a positive if we see demand picking up."
Long-dated U.S. Treasury yields fell from four-week highs on Monday, while the dollar index, which measures the greenback against a basket of six other currencies, fell 0.04%.
Benchmark 10-year notes last rose 2/32 in price to yield 2.5543%, from 2.56% late on Friday.
(Reporting by April Joyner in New York; Additional reporting by Tom Finn in London and Gertrude Chavez-Dreyfuss, Karen Brettell, Devika Krishna Kumar and Stephanie Kelly in New York; Editing by Chris Reese, Leslie Adler and Sonya Hepinstall)
By April Joyner