Cyprus and the European Union negotiators struck a last-minute deal early Monday that will clear the way for a €10 billion bailout the island nation needs to avoid collapse.
Investors are likely to view the agreement as a positive step, and Asian markets gained after details of the deal were released.
The new bailout program includes deep restructuring of the country's banking sector.
Without a deal, the tiny state risked losing emergency funding from the European Central Bank as early as Tuesday. That would have meant financial collapse and almost certain exit from the eurozone.
A plan to tax all bank accounts, a key sticking point that had enraged Cypriots, was shelved.
While much focus will be on Europe, a smattering of data this week will update investors on the state of the U.S. economy.
News of improvements in the housing market could be further bolstered this week with from the Case-Shiller 20-city index, new and pending home sales and the MBA mortgage index.
Last week, reports showed that previously owned homes sold at the strongest pace in more than three years. The housing market has been bolstered by a drop in foreclosures and near record low mortgage rates. A decline in the nation's unemployment rate has also given the market a boost.
Investors will know if a better real estate market has translated to Americans feeling good about the nation's economic health. Consumer confidence, personal income and spending and Michigan sentiment will be released this week.
These reports will be closely watched, as they will shed light on whether consumers have pulled back as a result of the payroll tax and a delay in tax refunds.
A third estimate of U.S. gross domestic product in the fourth quarter will also be released this week. Economists surveyed by Briefing.com expect that the U.S. economy expanded by 0.3% in the last three months of 2012.
This would be a change from two earlier estimates. Last month, the Commerce Department reported that GDP, the broadest measure of the nation's economic growth, grew at an annual rate of 0.1% in the fourth quarter, after initially reporting that the economy contracted 0.1% in the period.