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Investors have shown "less pessimism," Pursche added. "First- and second-quarter calls had a more negative tone. There was anxiety over interest rates, Fed policy, the recession that never came."
"It looks like we're trying to hold here, and the reason is probably because yields have come down somewhat and these comments by Mary Daly may have also helped a little bit," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Investors are focused on Friday's personal consumption expenditures price index for a fresh view of the inflation picture. This week also brings other data including on durable goods and second-quarter gross domestic product, as well as remarks by Fed policymakers such as Chair Jerome Powell.
Traders' bets that the Fed will leave rates unchanged at its September policy meeting stood at 93%, while they priced in a roughly 54% chance of a pause in November, the CME Group's FedWatch tool showed.
Nvidia, one of the biggest winners in this year's artificial intelligence tech stock rally, is expected to forecast quarterly revenue above analysts' estimates when it reports late on Wednesday. Nvidia's stock is up more than 220% for the year so far, while the Nasdaq is up 29%.