NEW YORK (AP) -- U.S. stocks are drifting on Wednesday as Wall Street continues a pause from its big recent rally, and even Treasury yields are stalling following their rapid rise.
The S&P 500 was virtually unchanged after flipping between small gains and losses in the first few minutes of trading. It remains close to its record high set at the end of last week. The Dow Jones Industrial Average was down 5 points, or less than 0.1%, at 31,063, as of 9:50 a.m. Eastern time, and the Nasdaq composite was 0.2% higher.
Markets around the world have rushed higher recently on building optimism that a healthier economy is on the way because of the rollout of coronavirus vaccines and the prospect for more stimulus from a U.S. government soon to be run by Democrats.
Some of the biggest action has been in the bond market, where expectations for increased federal borrowing, economic growth and inflation have pushed longer-term Treasury yields to their highest levels since last spring.
The yield on the 10-year Treasury slowed its ascent, though, and dipped to 1.11% from 1.12% late Tuesday. Analysts said statements from two Federal Reserve officials a day earlier helped to calm concerns that it may curtail its purchases of Treasuries, which have helped keep rates low in hopes of boosting financial markets and the economy. The concerns are reminiscent of the "taper tantrum" that sent markets tumbling in 2013 after the Fed said it expected to slow its bond purchases as the economy recovered.
Low rates have been one of the main underpinnings for the stock market's rise to records, even though much of the economy is still struggling under the worsening pandemic. The 10-year yield has been spurting higher, up from 0.90% on Jan. 4, the day before two runoff elections in Georgia gave control of the Senate -- and thus Washington -- to Democrats.
The Fed has had the freedom to keep short-term rates at nearly zero in part because inflation has remained very weak. A report on Wednesday showed that prices at the consumer level were 1.4% higher in December from a year earlier. That was slightly more than economists expected, though it remains relatively low.
The Fed will release its latest "Beige book" in the afternoon, which gives anecdotal evidence it's hearing about how businesses are faring around the country. Fed Chair Jerome Powell will also be speaking at an online event hosted by Princeton University on Thursday, which may offer more clues about the Fed's intent.
If interest rates keep climbing, it could bolster the argument for critics of the stock market, who say it has climbed too high and left prices too expensive.
Other risks are also hanging over the market, headlined by the worsening pandemic. Accelerating coronavirus counts and hospitalizations are doing more damage to the economy, and U.S. employers cut more jobs last month than they added for the first time since the spring.
Political uncertainty also continues to engulf Washington, where President Donald Trump appears to be on the verge of getting impeached for a second time. Democrats and even some Republicans say Trump incited an insurrection after encouraging a mob of loyalists who went on to storm the Capitol last week.
Investors have been looking past such political turmoil for the most part, though, focusing instead on expectations for a stronger economy ahead.
In European stock markets, indexes were also making only modest moves. The German DAX returned 0.2%, and the French CAC 40 added 0.4%. The FTSE 100 in London was nearly unchanged.
Asian markets were mixed. Japan's Nikkei 225 rose 1%, and South Korea's Kospi gained 0.7%. Hong Kong's Hang Seng slipped 0.1%, and stocks in Shanghai lost 0.3%.