By Anna Isaac, Caitlin McCabe and Frances Yoon 

U.S. stocks wavered Wednesday as investors' optimism about the reopening of economies was offset by a tumble in shares of mega-cap technology companies.

The S&P 500 climbed after the opening bell, briefly passing the 3000 threshold, but turned lower and was off 0.3% by midday. The tech-heavy Nasdaq Composite index dropped 1.2%.

The rally in big tech stocks that has powered much of the stock market's rebound since late March has largely stalled over the past week. Netflix dropped 3.3% Wednesday, while Amazon fell 2.3%.

The stocks, along with Apple, Google parent Alphabet and Facebook, account for roughly 20% of the value of the S&P 500, giving them significant sway over the direction of the benchmark index.

Their stumble overshadowed some of the optimism building in recent days that the White House and Congress are considering more measures to blunt the impact of historic levels of unemployment on the economy. The Trump administration is examining proposals to provide cash incentives to encourage unemployed Americans to return to work, a top economic adviser said in an interview on Fox News.

Biotechnology companies also declined, despite promising signs for a coronavirus vaccine last week. Moderna, which reported encouraging early results from its vaccine candidate last week, lost 15%. Inovio Pharmaceuticals fell 13%.

Among the bright spots in the market were some of the cyclical stocks that have been pummeled this year. The S&P 500's financials and industrials sectors were the top performers, rising 3% and 2%, respectively.

The Dow Jones Industrial Average, which is heavily weighed towards those sectors, also held on to modest gains. The blue-chip index was up about 190 points, or 0.8%, on track to close above 25000 for the first time since early March.

The Dow, which climbed more than 360 points earlier in the session, was powered by gains in American Express, Goldman Sachs and JPMorgan Chase, all of which climbed more than 4%.

The economically sensitive stocks were buoyed by signs that consumers are beginning to venture out into communities and spend again. Restaurant bookings and spending on hotels and airlines appear to be picking up. The Conference Board's consumer confidence index also stabilized in May.

"U.S.-China tension has taken a back seat," said Edward Park, deputy chief investment officer at Brooks Macdonald. "A lack of major escalation means markets are more focused on central bank interventions, the levels of liquidity on offer, and economic recovery as countries emerge from lockdowns."

Later Wednesday, investors will be watching for the Federal Reserve's beige book report on economic conditions. Home builder Toll Brothers will also report earnings, giving investors another glimpse of the virus' impact on real estate.

Outside the U.S., European stocks were essentially flat after trading higher for most of the day.

European authorities are also likely to step up stimulus measures, with the European Central Bank likely boosting its bond-buying programs and top officials working toward an agreement on a recovery fund, according to Florian Hense, an economist at Berenberg Bank.

The European Commission is proposing a 750 billion euro ($827 billion) recovery fund in a "turning point" in the response to the crisis, Paolo Gentiloni, the European economy commissioner, tweeted Wednesday.

Among European stocks, car makers were some of the biggest gainers. French President Emmanuel Macron on Tuesday evening said his government planned to spend billions of euros to prop up the country's auto industry amid a collapse in car purchases caused by the coronavirus crisis. Renault rose over 15% in Paris, while Peugeot climbed 4.8%.

"It's the biggest automotive intervention in history," said Demian Flowers, head of automotive research at Commerzbank. But the impact on stocks could be short-lived, based on the experience of 2009, Mr. Flowers said. Incentive programs for consumers can be temporarily effective, bringing forward purchases rather than building sustained demand.

The yield on the benchmark 10-year U.S. Treasury also ticked up Wednesday to 0.667% from 0.697% Tuesday. Yields rise when bond prices fall.

Meanwhile, Brent crude, the global benchmark for oil, slipped 4.4% to $35.09. Russian government officials have signaled that the country may hold off on committing to any extended production cuts ahead of a June meeting among major oil exporters, strategists at ING wrote in a note to clients.

In Asia, the main equity benchmarks reflected mixed sentiment by the close of trading. Japan's Nikkei 225 gained 0.7%. China's Shanghai Composite drifted 0.3% lower.

Write to Anna Isaac at anna.isaac@wsj.com, Caitlin McCabe at caitlin.mccabe@wsj.com and Frances Yoon at frances.yoon@wsj.com

(END) Dow Jones Newswires

May 27, 2020 12:15 ET (16:15 GMT)

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