The S&P 500 and Nasdaq Composite closed slightly higher on Wednesday, led by tech shares, as traders kept an eye on interest rates, the political uncertainty coming out of Washington and a still raging pandemic.

The broader market index gained 0.2% to end the day at 3,809.84, and the tech-heavy Nasdaq advanced 0.4% to 13,128.95. The Dow Jones Industrial Average closed just 8.22 points lower, or 0.03%, at 31,060.47.

Intel jumped nearly 7% on news that CEO Bob Swan would step down, effective Feb. 15. Other tech-related names also caught a bid, with Netflix and Amazon popping 2.7% and 1.4%, respectively. Apple also closed higher by more than 1%.

Wednesday's moves came as U.S. Treasury rates eased from their March highs. The benchmark 10-year note yield fell more than 5 basis points to 1.092%. The 30-year bond yield also fell on Wednesday to 1.823%. On Tuesday, the benchmark rate traded as high as 1.187%.

Despite this decline, the 10-year rate remains more than 15 basis points above its 2020 close of 0.92%.

Given the rise in rates this year, Credit Suisse recommended that investors favor pro-cyclical sectors, including financials and energy. Rising rates could hurt growth stocks, however, which have been the market stalwarts during the pandemic.

"Overall, we believe the rate backdrop will stabilize as investors acclimate to the shift in inflation expectations," wrote UBS credit strategist Frank Sileo in a note. "We continue to expect modest gains in 2021."

Expectations for additional fiscal stimulus is one of the reasons behind the steady move higher in yields. President-elect Joe Biden is expected to release details on his economic plan on Thursday.

Wall Street was coming off a muted session as the major averages paused on their recent run to record highs.

"The market rally has taken a break this week," said Mark Hackett, chief of investment research at Nationwide. He noted, however, that "sentiment and risk indicators continue to reflect investor optimism, with credit spreads at their tightest level since before the pandemic, fear & greed indicators at elevated levels, and the put/call ratio near historic lows."

Meanwhile, turmoil in Washington continues. Vice President Mike Pence said Tuesday night he will not remove President Donald Trump from office. That came before the Democratic-held House approved a resolution urging Pence and the Cabinet to push Trump out of the White House after he incited last week's riot on the Capitol.

The House of Representatives was voting on Wednesday to impeach Trump for a second time. Trump called on all Americans to help ease political tensions.

Covid cases also continue to increase in the U.S. and abroad. The U.S. is recording at least 247,600 new Covid-19 cases and at least 3,340 virus-related deaths each day, based on a seven-day average calculated by CNBC using Johns Hopkins University data.

Still, many say the U.S. is poised to return to growth later this year.

"In 2021, the U.S. economy should experience strong tailwinds from additional fiscal and monetary stimulus coupled with an end to the pandemic's impact on the economy," said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. "Pent-up demand in industries impacted by COVID-19 ... and a needed inventory rebuild should further spur job growth," he added.

Taken together, Schutte said this sets the stage for above-average economic growth, and he sees stocks climbing to new highs.

—CNBC's Jacob Pramuk contributed reporting.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.