Wall Street stocks recovered Monday, shaking off some of the worries around the Federal Reserve's "higher for longer" interest rate strategy.

At the closing bell, the S&P 500 (^GSPC) was up 0.4%, while the Dow Jones Industrial Average (^DJI) gained a more modest 0.1%. The Nasdaq Composite (^IXIC) was up 0.5%. The 10-year Treasury yield (^TNX) touched its highest levels since 2007, closing above 4.5%.

Investors are now getting ready for a fresh read on PCE inflation due out Friday for more insight into the Fed's rate path.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

Meanwhile, with less than a week left to avert a government shutdown, investors are starting to assess its potential impact on the economy, given there's little sign of progress on a budget agreement by lawmakers. A reading on second quarter GDP is scheduled for Thursday.

Sunday's tentative deal to end the Hollywood writers strike moved media stocks. But there's less optimism around the autoworkers strike after Ford (F) said despite progress in some areas, there are "significant gaps to close" before it can reach a new labor agreement with the UAW.

Elsewhere, signs of growing debt woes at Chinese property developers — Evergrande, in particular — rattled nerves about the impact on the world's second-biggest economy.

In individual stocks, Amazon (AMZN) has signed a deal to invest up to $4 billion in startup Anthropic, pulling in a crucial partner in its push to become a major player in AI.

Eyes are also on Booking Holdings (BKNG), whose brands include Booking.com and Priceline, after its proposed $1.7 billion purchase of Etraveli was blocked by the EU antitrust regulator.

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