NEW YORK (AP) — U.S. stocks are holding close to their record highs Monday, as trading gets underway in a year where the dominant expectation is that a powerful economic rebound will eventually sweep the world.

The S&P 500 was flipping between small gains and losses in the first few minutes of trading and was down 0.2%, as of 9:58 a.m. Eastern time.

The Dow Jones Industrial Average also edged down from its record set last week and was 94 points lower, or 0.3%, at 30,511. The Nasdaq composite was 0.1% lower.

Most European and Asian stock markets were higher, while Treasury yields climbed in a signal of rising expectations for economic growth and inflation.

Optimism about a better future coming thanks to vaccines has been strong enough to paper over concerns about the present, as the pandemic worsens around the world.

The United Kingdom has been particularly hard hit by a new variant of the coronavirus that appears to be much more contagious. On Monday, the United Kingdom became the first nation to start using the COVID-19 vaccine developed by Oxford University and drugmaker AstraZeneca.

In the United States, regulators have already approved two other vaccines. China last week gave the greenlight for its first domestically developed vaccine. Others are also being tested.

The hope is that vaccines will allow daily life around the world to slowly get back to normal. That's helped spark a recovery for stocks of travel-related businesses, smaller companies and other industries left behind for much of the pandemic.

The Russell 2000 index of smaller stocks was leading the market Monday. It was up 0.2%.

Even though infection rates and hospitalizations are now at such frightening levels, investors are betting that ultralow interest rates provided by the Federal Reserve and financial support for the economy recently approved by Congress can help tide the economy over until vaccinations become more widespread.

Governments might throw less stimulus at their economies than last year, but policy is “still at a very loose setting,” which supports stock prices and lending, said Kerry Craig of JP Morgan Asset Management in a report.

“Investors should look through the bumpier start to the new economic cycle and focus on the improved earnings outlook,” Craig said.

Of course, many risks remain for the market. Prices have climbed enough that critics say they may too expensive, particularly if the big rebound in corporate profits that investors expect to occur later this year doesn’t materialize.

Politics is also still a wild card. Two runoff races in Georgia on Tuesday will determine which party controls the Senate. President Donald Trump also is continuing his push to reverse the results of the free and fair election that saw him lose to Democratic president-elect Joe Biden.

In European stock markets, France’s CAC 40 gained 1.5%, and Germany’s DAX returned 0.9%. The FTSE 100 in London jumped 2.7%.

In Asia, Tokyo’s Nikkei 225 lost 0.7% after Prime Minister Yoshihide Suga said a state of emergency was under consideration for the Japanese capital and three surrounding prefectures due to surging virus caseloads.

Suga called on restaurants and bars to close by 8 p.m. and said it would be difficult to restart a travel promotion program that was suspended last month. He said the government would expedite approval of coronavirus vaccines and begin providing injections in February.

South Korea’s Kospi rose 2.5%, Hong Kong’s Hang Seng gained 0.9% and stocks in Shanghai climbed 0.9%.

In the bond market, the yield on the 10-year Treasury rose to 0.94% from 0.89% late Thursday. Markets were closed Friday for New Year’s Day.

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AP Business Writer Joe McDonald contributed.