(Changes rebound to steady in headline) * Eyes on Fed policy readout at 1800 GMT * U.S. 10-year Treasury yields cannot sustain fall below 1.3% * U.S. stock prices move higher NEW YORK, July 7 (Reuters) - Stock prices recovered from an early fall and bond yields inched up from a 4-1/2 month low during U.S. trading on Wednesday, steadying ahead of a readout on American monetary policy due later in the day. The early wobble reflected fears that the U.S. economic recovery may be slowing, and of the spread of COVID-19 variants. Those factors tend to cloud the view that rates may rise sooner than expected to curb inflation, though many investors believe current inflation signs are temporary. Market participants will get fresh clues about when and how much the U.S. Federal Reserve will tilt towards fighting inflation and reducing support for the economy at 1800 GMT, when it releases minutes of its June 15-16 policy meeting. Justin Lederer, interest rate strategist at Cantor Fitzgerald in New York, said the market was leaning towards higher rates as the post-COVID economic recovery gained strength. But, he added: “The market is not ready to go to higher yields and every little down tick is quickly met with buyers.” At 1650 GMT, the yield on 10-year U.S. Treasury notes was down 5.4 basis points to 1.316% having earlier fallen as far as 1.2960%. Yields fall when bond prices rise. Stock prices rallied from lows to post slight gains so far for the day. The Dow Jones Industrial Average was up 73.97 points, or 0.21 percent, to 34,651.34. The broad S&P 500 gained 14.75 points, or 0.34 percent, to 4,358.29. The tech-heavy Nasdaq Composite added 16.93 points, or 0.12 percent, to 14,680.57. “There’s a sense with recent economic data that even if there are some Fed members likely to look towards tapering (support for the economy), the overall policy will stay very loose and uninterrupted because we are not seeing anything indicative of ‘too hot’,” said Juan Perez, senior FX strategist at Tempus Inc in Washington. The dollar index, which tracks the greenback against a basket of six currencies, was up 0.148 points or 0.16 percent, to 92.694. Oil prices continued their recent decline. Brent crude was last down $1.16, or 1.56%, at $73.37 a barrel. U.S. crude was down $1.36, or 1.85%, at $72.01 per barrel. Gold extended gains to a sixth session, helped by the lower Treasury yields, rising 0.27 percent to $1,801.46 an ounce. Stocks had also climbed in Europe. But overall, global stocks were little changed, with the MSCI world equity index , which tracks shares in 45 nations, down 2.03 points or 0.28 percent, to 723.35. Additional reporting by Carolyn Cohn in London and Wayne Cole in Sydney; Editing by Peter Graff, Kirsten Donovan Our Standards: The Thomson Reuters Trust Principles.