NEW YORK (AP) — U.S. stocks are drifting near their record highs on Friday, following a sober reminder of how many jobs the pandemic is destroying, as Wall Street balances expectations for the economy’s potentially brighter future against its current pain.

The S&P 500 was up 0.4% in afternoon trading after President Donald Trump acknowledged late Thursday that he’ll be leaving the White House later this month. With Democrats soon in control of the presidency, Senate and House, investors are anticipating Washington will try to deliver even more stimulus for the struggling economy. That’s layering on top of expectations already built up for the economy to get healthier as coronavirus vaccines roll out in 2021.

The Dow Jones Industrial Average was swinging between gains and losses and was down 20 points, or 0.1%, at 31,020, as of 12:15 p.m. Eastern time, and the Nasdaq composite was 0.8% higher. All the major U.S. stock indexes set record highs set a day before.

A much weaker-than-expected report on the jobs market underscored the stakes for the economy, and analysts said it adds more pressure on Congress to act. Employers cut 140,000 more jobs last month than they added as the worsening pandemic led more businesses to shut down, the Labor Department said.

It was the first month of job losses for the economy since April, and it was much a worse reading than the modest growth that economists were expecting to see. Such pressure is rising on economies around the world as the pandemic accelerates.

Treasury yields zigzagged following the release of the jobs report, but they remain on an upward trend. Expectations for increased borrowing by the U.S. government, more stimulus for the economy and the possibility of higher inflation have carried the yield on the 10-year Treasury to 1.11%. That’s up from 1.05% late Thursday and 0.90% early this week.

Stocks of smaller companies were stable. The Russell 2000 index of small-cap stocks was unchanged, but it's still up 6.2% this week, quadruple the 1.6% gain for the big stocks in the S&P 500.

Smaller stocks tend to rise and fall more than their bigger rivals with expectations for the economy’s strength. And many investors are expecting Washington to soon try to send bigger cash payments to most Americans, spend more on infrastructure and provide other support for the struggling economy.

Vaccine distribution is ramping up, but will still likely take many months while people continue to struggle with unemployment, said Jack Manley, global market strategist at J.P. Morgan Asset Management.

“That's why we're excited about what we might see from a fiscal perspective,” he said. “You’re going to need something to shore up those people.”

The expectations began building shortly after November’s elections, and they accelerated this week after Democrats won two Georgia runoff elections for the Senate. They will give Democrats a majority in the Senate, with Vice President-elect Kamala Harris providing a tie-breaking vote amid a 50-50 split with Republicans. Democrats already controlled the House, and Democrat Joe Biden is set to take the presidential oath of office on Jan. 20.

Another encouraging thing for many investors is that Democrats will have only a thin majority in the Senate. In the optimistic case for Wall Street, that could give them enough clout to push through more stimulus for the economy but not enough to raise tax rates sharply and toughen up regulations so much that they significantly damage profits for companies.

The S&P 500 was up as much as 0.5% earlier Friday, but it briefly flipped to a tiny loss as the morning progressed. Financial stocks gave up some of their big gains from earlier in the week, which were triggered by expectations for a strengthening economy and bigger profits from making loans at higher interest rates. JPMorgan Chase slipped 0.4%, and Bank of America fell 1.5% for two of the biggest weights on the S&P 500.

On the other end of the market was Tesla, which rose 7.7%. The auto maker surged more than 740% last year, and they're climbing more amid hopes that a Democratically run D.C. could encourage the use of more electric vehicles. The jump pushes Tesla's total market value past Facebook's, and it's now the fifth-largest stock in the S&P 500.

Optimism emanating from Washington has helped to lift markets around the world.

In Asian stock markets, Japan’s Nikkei 225 rose 2.4%, its highest finish in more than 30 years. That’s even though Japan announced a state of emergency for Tokyo and nearby areas, asking people to stay home and refrain from going out at night to dine and drink.

South Korea’s Kospi gained 4%, Hong Kong’s Hang Seng rose 1.2% and stocks in Shanghai slipped 0.2%.

In European markets, Germany’s DAX returned 0.6%, and France’s CAC 40 rose 0.7%. The FTSE 100 in London rose 0.2%.

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AP Business Writer Yuri Kageyama contributed.