Wall Street's major indexes fell on Wednesday, stalling the rally that marked the start of 2018, after a report that China is considering slowing its purchases of US government debt. Bank stocks were largely favored as US Treasury yields jumped to 10-month highs after Bloomberg reported the US bond market was becoming less attractive for Beijing, one of the largest foreign holders of US government debt.

The report weakened the dollar, which slipped 0.4 percent, while gold jumped to its highest in four months. At 11:03 am ET (1603 GMT), the Dow Jones Industrial Average was down 39.3 points, or 0.15 percent, at 25,346.5 and the S&P 500 was down 5.27 points, or 0.19 percent, at 2,746.02. The Nasdaq Composite was down 29.08 points, or 0.41 percent, at 7,134.49.

The CBOE Volatility index, a widely followed measure of market anxiety, rose to its highest level in more than a week at 10.41. "We've had a tremendous run, mostly unabated since Trump's election in 2016 and with no volatility. If we do see a pullback, that's going to be a buying opportunity," said Michael Scanlon, managing director of Manulife Asset Management.

The S&P and the Nasdaq have closed at record highs on all days in 2018, on optimism over global growth and expectations of a strong quarterly earnings. Wells Fargo and JPMorgan rose about 0.8 percent each. The two largest US lenders will kick off the fourth-quarter earnings season on Friday. Earnings for S&P 500 companies are expected to increase by 11.8 percent, with biggest contribution from the energy sector, according to Thomson Reuters I/B/E/S.

Copyright Reuters, 2018