Stocks pared their monthly gains, while bond yields rose, as investors awaited the Federal Reserve's decision on Wednesday for clues on whether officials will slow the pace of rate hikes as early as December.

Big tech weighed heavily on the S&P 500, while energy stocks swung back and forth on news that Biden will ask Congress to consider tax penalties for producers reaping record profits.

A bond selloff across the curve pushed two-year US yields to around 4.5%. In the midst of the Fed's most aggressive tightening campaign in four decades, swap markets are pricing in a 75-basis-point hike this week. The outlook for the following meetings is less certain, with traders seeing a "toss of a coin" between that size increase and a 50-basis-point increase in the final month of 2022.