What year is your iMac and what macOS version was or is it running?
Have you tried using a different mouse? Borrow a wired USB mouse if you can.
If rebooting your Mac doesn’t fix things, see if the problem still happens in Safe mode (hold the shift key down at startup). It can take much longer to safe boot (10 min) so be patient.
How to use safe mode on your Mac - Apple Support
Safe mode forces the OS to clear certain caches and logs and do other miscellaneous housekeeping. It's non-destructive to user data so is safe to do. Very often certain weird software behavior is corrected by simply logging in this way as a troubleshooting method. When you're in safe boot, the machine will not be at its best performance, especially with graphics, but that's expected.
Does the problem persist while in Safe mode?
Exit safe mode by restarting your Mac normally and re-evaluate the issue again.
If the problem is still unresolved, please return here and post a reply and we’ll see what else we can come up with for help.