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US stocks lost momentum on Wednesday, as investors assessed hotter-than-expected wholesale inflation data and looked to Federal Reserve minutes for a window into policymakers' thinking on interest rates.

The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) were both broadly flat, retracing more solid gains earlier in the session. The tech-heavy Nasdaq Composite (^IXIC) put on roughly 0.3%, poised to build on Tuesday's win.

US wholesale prices rose last month at the fastest pace since April, with the producer price index for September climbing 2.2% from a year earlier, compared with the 1.6% gain expected.

The PPI reading suggests that inflationary pressures remain despite the Fed's aggressive interest rate hikes. Minutes from the central bank's last meeting released Wednesday confirmed that Fed members saw one more hike in the bank's two meetings this year.

Meanwhile, Treasury yields continued to retreat from 16-year highs hit during the bond sell-off after Israel stepped up its bombardment of Gaza. The benchmark 10-year (^TNX) yield dropped to trade near 4.61% on Wednesday, compared with last week's peak above 4.88%.

But bonds may not be out of the woods yet, some analysts said, given the lack of weak economic data or a solid reason for yields to keep falling.

More investors are now betting the Federal Reserve won't hike interest rates at its November meeting, as the recent surge in bond yields is seen as effectively doing the tightening work of the central bank.

A firmer-than-expected reading on US consumer inflation on Thursday could compel the Fed to take action, some on Wall Street suggest.

Potentially lifting some pressure, oil prices continued to slide as the impact on supply from the Middle East conflict appeared contained. Crude oil futures (CL=F) dropped 2.8% to below $84, while Brent crude futures (BZ=F) were down 2.3% at under $86.

In individual stocks, Exxon Mobil (XOM) shares slipped 4% after the energy giant agreed to buy shale rival Pioneer Natural Resources (PXD) in an all-stock deal valued at almost $60 billion. Pioneer shares gained less than 1%.

Also in focus, Birkenstock (BIRK) is expected to make its trading debut on the NYSE on Wednesday, after pricing its IPO at $46 a share. That values the German sandal maker at $8.64 billion.

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