Stocks indexes are mostly higher after latest Fed minutes

A man wearing face a mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Wednesday, July 7, 2021. Asian stock markets followed Wall Street lower Wednesday after U.S. services activity weakened. (AP Photo/Kin Cheung)

A man wearing face a mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Wednesday, July 7, 2021. Asian stock markets followed Wall Street lower Wednesday after U.S. services activity weakened. (AP Photo/Kin Cheung)

A woman wearing face a mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Wednesday, July 7, 2021. Asian stock markets followed Wall Street lower Wednesday after U.S. services activity weakened. (AP Photo/Kin Cheung)

A man wearing face a mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Wednesday, July 7, 2021. Asian stock markets followed Wall Street lower Wednesday after U.S. services activity weakened. (AP Photo/Kin Cheung)

U.S. stock indexes are mostly higher Wednesday, a day after the S&P 500 snapped a seven-day winning streak. Investors are watching the bond market, where yields have tumbled sharply in the last couple of days despite strong economic data.

The S&P 500 index was up 0.2% as of 2:40 p.m. Eastern. The Dow Jones Industrial Average rose 31 points, or 0.1%, to 34,613 and the Nasdaq Composite slipped 0.1% after shedding an early gain.

Technology and industrial industrial stocks accounted for much of the advance in the S&P 500. Apple rose 1.6% and Otis rose 2.3%. A modest pullback by other sectors kept those gains in check, including energy stocks, which slid as oil prices fell 1.7%.

The major stock indexes and Treasury yields were little changed shortly after the Federal Reserve issued the minutes from its policymakers' June meeting. The minutes, released at 2 p.m. Eastern, show Fed officials began debating when and how they would reduce the monthly bond purchases that they have used to keep longer-term interest rates in check.

The discussions signal that the Fed is moving closer to a decision to taper those purchases, though most analysts don’t expect a reduction until late this year. After the last meeting, Fed policymakers said they planned to raise interest rates as soon as 2023, which was sooner than the market expected.

Bond yields have moved steadily lower the past month, with a particularly steep drop the past two days. It's an unusual occurrence for the bond market given there's been no economic data to imply an economic slowdown or deflation. In fact, the data for several weeks has shown the opposite — an economic growing quickly out of the pandemic, and inflation tied to demand for raw materials and workers.

The benchmark 10-year Treasury note was trading at 1.32%, down from 1.37% the day before. A month ago, the 10-year note was trading at around 1.62%. The last time bond yields moved lower so quickly was in March 2020 when the pandemic effectively shut down the U.S. economy.

Lower bond yields can be good for many parts of the economy, however. Mortgage rates are tied closely to bond yields, and government borrowing costs fall when the cost of issuing bonds decreases.

Stocks that are heavily influenced by interest rates, particularly banks, slipped in early trading but mostly recovered.

Investors were concerned for much of the year about rising inflation and whether higher rates were going to be temporary and tied to the growing economy or longer lasting. The Federal Reserve has said it expects any bump to be short-term and investors seem to be less fearful about a post-pandemic economy with higher inflation.

“There's a fundamental reset going on right now where investors are looking beyond 2021 and 2022,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “Once we get beyond the recovery, the next normal is probably going to look like the last normal.”