By Liz Moyer

-- Stocks gave back some of their earlier gains on Monday, with the Dow turning negative in late trading despite investors attempting to put interest rate fears behind them.

The markets are betting the Federal Reserve will raise rates by a slower quarter of a percentage point increment when it meets next month, compared to the higher rate hikes at recent meetings. 

The Fed is trying to quash inflation and sees its job as not yet finished. San Francisco Fed President Mary Daly said on Monday that she believes growth will continue to slow and the labor market will slow, both helping to bring down . She said the policymakers want to get rates to a level where they can hold for a period of time to make sure inflation is headed in the right direction.

That means getting back to a sustained move toward its 2% target rate. But that may mean rates will rise above 5%, policymakers have said in recent days.

Earnings season is also about to kick off, with many companies putting the final quarter of 2022 to bed and looking ahead to this year. Big banks kick off the season at the end of the week, expected to show the benefits of rising interest rates but will perhaps discuss what a slowing economy means for credit quality.

Here are three things that could affect markets tomorrow:

1. Powell speaks

Fed Chair Jerome Powell is on Tuesday at 9:00 ET (14:00 GMT) on the subject of central bank independence at a bank symposium in Sweden, according to the Fed's calendar.

2. Albertsons earnings

Grocery chain (NYSE:) is expected to report earnings per share of 67 cents on revenue of $17.6 billion.

3. Bed Bath & Beyond

The struggling home goods retailer (NASDAQ:) is expected to report a loss per share of $2.38 on revenue of $1.3B, but analysts will be listening for any update on its cash and financial position after the company said last week it was exploring options including a possible bankruptcy filing.