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Stocks End Higher as Wall Street Balances Recovery, Inflation Concerns

Stocks edge higher as investors look ahead to U.S. jobs data as the next market catalyst.

Stocks finished higher Wednesday as investors looked ahead to U.S. jobs data but held firm to concerns that inflation could hamper the economic recovery.

The Dow Jones Industrial Average rose 25 points, or 0.07%, to 34,600, and both the S&P 500 and the Nasdaq gained 0.14%.

Stocks had finished mixed on Tuesday as investors' optimism turned to concern that the Federal Reserve could put the brakes on the rebounding U.S. economy sooner than anticipated.

U.S. manufacturing expanded at a faster pace in May, renewing worries that the Fed may consider scaling back its monthly asset purchases. A strong report on the U.S. jobs picture Friday also could increase concern that the central bank could pull back on support.

The nonfarm payrolls report for May is expected by economists to show the U.S. added 656,600 jobs to the economy. 

But April's surprisingly low tally of 266,000 -- which came amid of surge in COVID vaccinations and state reopenings -- suggests workers are still reluctant to return to the job market for a number of reasons, including generous unemployment benefits and a dearth of child-care options.

Fed Gov. Lael Brainard said that while the U.S. has been approaching the Fed's goals of maximum employment and 2% inflation, more progress has to be seen before the Fed will ease off its accommodative monetary policy.

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“While we are far from our goals today, we are seeing welcome progress, and I expect to see further progress,” Brainard told the Economic Club of New York on Tuesday.

But “jobs are down by between 8 and 10 million compared with the level we would have seen in the absence of the pandemic. And it will be important to see sustained progress on inflation” and not just a temporary move higher.

Oil prices traded near two-year highs on Wednesday after OPEC and its allies said they gradually would increase production in July as expected.

Saudi Energy Minister Prince Abdulaziz bin Salman noted that solid demand recovery in the U.S. and China would help stabilize global oil markets.

BlackBerry  (BB)  shares continued their strong run higher Wednesday, jumping 32% as the Reddit retail-trading crowd boosted its interest in the security-software provider.

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AMC Entertainment  (AMC) , another of the so-called meme stocks, nearly doubled after it unveiled an investor tool that could give the company's 3 million shareholders significant influence over the world's biggest movie theater chain.

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