U.S. stocks could tread water again Thursday as investors await Friday morning's key employment report.
"You have to respect that the market is technically overbought and you had an incredible rally," said Quincy Krosby, market strategist at Prudential Financial. "The catalyst for it is the market's going to be paying very close attention to Friday's number."
Stocks gave up opening gains in morning trade Wednesday as energy halted a five-day win streak and Fed Chair Janet Yellen reiterated the possibility of raising rates in December, given supportive data.
"Two weeks in a row they've said December is a possibility and the market's starting to price that in," said David Spika, global investment strategist at GuideStone Capital Management.
The U.S. dollar index rose, gold fell and Treasury yields climbed. The yield hit 0.82 percent, its highest since April 2011. The 10-year yield also briefly rose above 2.24 percent, but only to its highest level since the Fed meeting on Sept. 17.
Markets are now pricing in a nearly 60 percent chance of a December rate hike, according to CME Group's FedWatch. The tool showed the probability was about half that just a month ago.
"The fed funds futures market has upped the odds. Every day you'll see the fed funds futures moving one way or another. This is drip, drip until we get to that day," Krosby said.
Stocks ended Wednesday mildly lower, pausing after two days of gains in a solid start to November. The major averages are up 1 percent or more for the week so far and are all positive year to date.
"We had a huge risk-on rally in October … very much short covering, risk-on rally we've seen before. I think now investors are stepping back. They're looking at fundamentals, technical trends … they're going to be more cautious going into the rest of the year," Spika said, noting uncertainty around the Fed and China still remains.
While more Fed speakers are scheduled for Thursday, analysts said Yellen's comments and the forthcoming jobs report are most important.
Another key central bank leader, New York Fed President William Dudley, separately told reporters Wednesday that he would "completely agree" with Yellen on a December hike.
After a Wednesday evening speech on central bank independence, Fed Vice Chair Stanley Fischer is due to speak Thursday morning on a panel with the International Monetary Fund's Christine Lagarde on the financial services industry culture.
Read MoreJanet Yellen: December rate hike a 'live possibility'
At 8:30 a.m. ET, the Philadelphia Fed's Patrick Harker gives welcoming remarks at an event on energy interdependence, while Dudley gives opening remarks at a financial services industry conference.
Chicago Fed President Charles Evans is scheduled to give introductory remarks at a banking conference.
In the afternoon, Fed Gov. Dan Tarullo is due to speak on the regulation of international banks at a Chicago bank conference. Atlanta Fed President Dennis Lockhart speaks at the Joint Central Bank conference in Switzerland.
At 4 p.m. ET, former Fed Chairman Ben Bernanke also shares remarks on U.S. central bank policy at the IMF conference.
In economic reports, weekly jobless claims and productivity and costs data are due at 8:30 a.m.
Toyota, Disney, Nvidia, Symantec, Kraft Heinz and Shake Shack are among the companies reporting earnings.
Those quarterly reports could put a damper to Thursday's session as well.
"It's highly unusual for the market to continue to move higher when we've had such a poor profit backdrop and the Fed is not easing policy," said James Abate, chief investment officer at Centre Funds.
In a Wednesday afternoon report, S&P Capital IQ senior analyst Lindsey Bell said aggregate third-quarter S&P 500 earnings show a decline of 1.79 percent from the same period last year. However, she noted that is a 337 basis point improvement from the beginning of earnings season.
Read MoreConsumer sentiment inches up in October
— Reuters contributed to this report