With stocks and bonds holding in a range, investors could find some directional support from Thursday's weekly jobless claims.
"That gives us a pretty good indication of the monthly jobs report," said Paul Nolte, a portfolio manager at Kingsview Asset Management. Weekly claims are expected at 8:30 a.m. EDT, with analysts polled by Reuters estimating a slight increase to 275,000 from last week's 265,000. The initial filings for unemployment benefits per week have held near 15-year lows.
"As long as that does not signal a spike upward, (it's) indicating the job market is stabilizing where the Fed would be comfortable raising rates," said Kevin Mahn, president and chief investment officer at Hennion & Walsh Asset Management.
Unlike most analysts, even those at his own firm, Mahn said economic reports in housing and other areas "give the Federal Reserve enough credence to raise interest rates for the first time in June."
Consensus is for a rate hike in September or later in the year, while central bank policymakers have not ruled out a June liftoff.
Also due at 8:30 a.m., the producer price index for April will shed light on inflation. The monthly measure of input costs is a secondary factor in determining the rate of change in prices, with the consumer price index the primary indicator.
Consensus for PPI expects an unchanged core figure month over month at 0.2 percent and a slight increase to 1.1 percent from 0.9 percent year over year, Reuters data showed.
The Fed closely watches the employment situation and inflation for signs the economy is ready for a short-term interest rate hike.
To be sure, data in the second quarter such as April retail sales have so far given little indication of a significant rebound in economic expansion, causing JPMorgan to lower its estimates for gross domestic product growth in the period to 2 percent from 2.5 percent.
Treasury yields gained on Wednesday but remained off six-month highs touched Tuesday morning. Analysts agreed that yields remained range bound, albeit at the higher end of the range.
"They've been selling bonds to adjust and hedge some positions," said Dan Heckman, fixed income strategist at U.S. Bank Wealth Management. "Right now there's a lot of uneasiness of where the Fed is going."
Bank of America Merrill Lynch's Global Broad Market Index measures the performance of international investment-grade debt and showed a $150 billion loss in value between last Monday and Tuesday.
However, demand was strong for both the $24 billion auction of three-year notes on Tuesday and Wednesday's $24 billion of 10-year notes. Thursday's $16 billion, 30-year bond auction is the last sale for the week.
Stocks closed narrowly mixed on Wednesday in what some analysts called an "adjustment period."
"For stocks, the markets are trying to adjust to the back up in yields and handicap whether or not it's going to be threatening to ... corporate profits," said Jeremy Zirin, head CIO investment strategist at UBS Wealth Management Americas. "From a fundamental perspective it's hard to justify yields above current levels."
The ended down 7.74 points, or 0.04 percent, at 18,060.49. The S&P 500 closed down 0.64 point, or 0.03 percent, at 2,098.48. Only the closed higher, up 5.5 points, or 0.11 percent, at 4,981.69 as Apple, Microsoft and other tech stocks gained.
"The S&P 500 remains within reach of its breakout level at 2,126," S&P Capital IQ's Sam Stovall said in a note late Wednesday. "Upon a break higher by the S&P 500, the Russell 2000 should offer confirmation that a larger leg higher in stocks is underway."