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  • US equities end the day with smaller gains amid a lack of major catalysts and cautious markets.
  • Fed’s Harker ruled out inflation fears, Beige Book suggests increasing price pressures.
  • AMC leads the surge in “meme stock”, commodities benefit from US dollar weakness.

Wall Street benchmarks posted mild gains, despite volatile moves fuelled by social-media frenzy, as traders turn cautious ahead of Friday’s US Nonfarm Payrolls (NFP). Also, mixed signals from the Fed and relating to the other risk catalysts, like US-China trade and global aides to combat the coronavirus (COVID-19), offered an additional cause to justify the sluggish moves.

US Federal Reserve officials keep rejecting reflation fears even as the monthly Beige Book data accept accelerating inflation woes. This joins the increasing of Sino-American phase-one deal and pushes for more stimulus by the US and other independent organizations, as well as governments, to confuse traders. Additionally, the cyberattack on the world’s largest meat producer and social-media-backed rally in some stocks, AMC to be notable, offered another reason to stop the bulls amid a light calendar.

That said, Dow Jones Industrial Average (DJI)  gained 25.07 points, or 0.07%, to close at 34,600. Further, the S&P 500 and Nasdaq posted similar gains of 0.14% while adding 6.08 and 19.85 points, to 4,208 and 13,756 respectively, during the day. It’s worth noting that the US 10-year Treasury yield’s 2.6 basis points (bps) of downside to 1.58% was a notable supporter of the mild up-moves.

Elsewhere, the energy sector benefited from the jump in WTI to a fresh high since late 2018 while stocks like Tesla weighed down amid the market’s indecision. Furthermore, news that shares of Etsy benefited from the news of acquiring British fashion app Depop whereas  Germany’s MorphoSys gained on a deal to buy Constellation Pharmaceuticals.

Looking forward, US ADP Employment Change, an early signal for Friday’s NFP, will join US ISM Services PMI  to direct near-term market moves. However, the pre-NFP trading lull could disappoint the momentum traders.