Congress must reach a compromise by Friday to avoid automatic spending cuts, part of the sequester.

Of key concern is the mandatory $85 billion in spending cuts this year, impacting the economic recovery as well as highlighting the market gridlock, which continues to dominate Washington, said President and Co-Founder James Frischling of New Oak.

While the U.S. Senate is set to consider bills that could avoid the cuts over the next few days, investors are expected to pay close attention to the testimony of Federal Reserve Chairman Ben Bernanke to Congress on Tuesday and Wednesday.

"Investors know that Federal Reserve's commitment to low interest rates and monetary policies have been the most important driver of stock market performance," Frischling said.

He added, "Any signs from the Chairman that such policies, like all good things, need to come to an end, will be seen as far more significant than the drama playing out in the sequester negotiations."