NEW YORK (AP) — U.S. stocks are drifting on Wednesday following some potentially discouraging updates on the U.S. economy.

The S&P 500 was edging up by 0.2% in afternoon trading, as momentum slowed following a big rally that had brought it back within 2.8% of its all-time high. The Dow Jones Industrial Average was up 26 points, or 0.1%, as of 2:45 p.m. Eastern time, and the Nasdaq composite was 0.5% higher.

The action was stronger in the bond market, where Treasury yields fell following a pair of weaker-than-expected reports on the economy. One said that activity contracted for U.S. retailers, finance companies and other businesses in the services industries last month, when economists were expecting to see growth. Businesses told the Institute for Supply Management in its survey that all the uncertainty created by tariffs is making it difficult for them to forecast and plan.

A second report suggested U.S. employers outside of the government hired far fewer workers last month than economists expected. The report from ADP said private employers hired just 37,000 more workers than they fired, down from the prior month’s 60,000.

That could bode ill for Friday’s more comprehensive jobs report coming from the U.S. Labor Department, which is one of Wall Street’s most anticipated data releases each month. So far, the U.S. job market has remained remarkably resilient despite years of high inflation and now the threat of President Donald Trump’s high tariffs. But weakness there could undermine the rest of the economy.

To be sure, ADP’s report historically has not been a perfect predictor of what the U.S. Labor Department’s report will say.

“Whether this report is accurate or not, traders and investors will read today’s number as a dark result for trading today,” according to Carl Weinberg, chief economist at High Frequency Economics. “This may be the tip of an iceberg, but it also could be a false start.”

Following the reports, traders built up expectations that the Federal Reserve will need to cut interest rates later this year in order to prop up the economy, which in turn caused the fall for Treasury yields. The weaker-than-expected ADP report also pushed Trump to call on Fed Chair Jerome Powell to deliver cuts to rates more quickly.

“‘Too Late’ Powell must now LOWER THE RATE,” Trump said on his Truth Social platform. “He is unbelievable!!! Europe has lowered NINE TIMES!”

The Fed has yet to cut interest rates this year after slashing them through the end of last year. Part of the reason is that the Fed wants to see how much Trump’s tariffs will hurt the economy and raise inflation. While lower interest rates could boost the economy, they could also give inflation more fuel.

Longer-term Treasury yields have also been rising in recent weeks because of reasons outside the Fed’s control. Investors have been demanding the U.S. government pay more in interest to borrow because of worries about whether it’s set to add trillions of dollars to its debt through tax cuts under discussion on Capitol Hill.

On Wall Street, Hewlett Packard Enterprise rose 1.5% after delivering a stronger profit for the latest quarter than analysts expected.

Wells Fargo rose 0.8% after the Federal Reserve on Tuesday lifted restrictions placed on the bank in 2018 for having a toxic sales and banking culture. Wells Fargo has spent the better part of a decade trying to restore its image with the public and convince policymakers that it had changed its ways.

CrowdStrike, the cybersecurity company that Delta Air Lines has sued for a technology outage last summer, fell 5.1% despite reporting a stronger profit for the latest quarter than analysts expected. Its revenue fell just short of Wall Street’s target, as did its forecast for revenue in the current quarter.

In stock markets abroad, indexes rose across much of Europe and Asia as the wait continued for more updates on trade talks that could convince Trump to lower his tariffs. Hopes for such deals have been a big reason U.S. stocks have roared back after falling roughly 20% below their record two months ago.

But nothing is assured, and Trump early Wednesday said of China’s leader Xi Jinping, “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!”

The European Union’s top trade negotiator, Maroš Šefčovič, met Wednesday with his American counterpart, U.S. Trade Representative Jamieson Greer, on the sidelines of a meeting of the Organisation for Economic Cooperation and Development.

In the bond market, the yield on the 10-year Treasury fell to 4.37% from 4.46% late Tuesday. The two-year Treasury yield, which more closely tracks traders’ expectations for what the Fed will do with overnight interest rates, eased to 3.88% from 3.96%.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.