By Will Horner

A handful of stocks popular with individual investors including AMC Entertainment and BlackBerry surged in early trading Wednesday, suggesting a mania that dominated markets earlier this year has returned.

AMC Entertainment Holdings jumped 13.1%, adding to a 22% rally Tuesday that came as the movie-theater chain said it had sold shares to a hedge fund. Other stocks popular among online traders were also rallying, with BlackBerry up 9.5% and Koss rising 10.7%.

In the broader market, U.S. stocks edged higher as investors awaited fresh insights on the economic rebound and rising inflation.

The S&P 500 index ticked up 0.1%. The broad market gauge finished Tuesday roughly flat. The tech-heavy Nasdaq Composite Index also advanced 0.1%, while the Dow Jones Industrial Average added 55 points, or 0.2%.

The major indexes, which are hovering close to all-time highs on the back of unprecedented fiscal and monetary support, are struggling for traction this month as investors look for ways to justify the high valuations already commanded by many stocks. On Tuesday, manufacturing data pointed to an expansion in factory activity driven by demand for goods, but also highlighted growing supply bottlenecks.

"It is going to be more and more difficult for markets to surprise to the upside," said Willem Sels, global chief investment officer at HSBC Private Bank. "The tide that lifted all boats isn't as strong anymore."

Companies that are more sensitive to the economy are likely to perform well, such as banks and firms powered by consumer spending, according to Mr. Sels. He also favors stocks that will benefit from government spending on infrastructure and sustainability. Concerns that the Fed may pare back on quantitative easing measures due to inflation pressures are likely to continue prompting unease in markets, he added.

"There will be data points coming out in the coming weeks that will be very strong, and they will point to inflation pressures," Mr. Sels said. "More and more people will be wondering if the Fed will stick to its position or change, and that will inevitably lead to volatility."

Dogecoin jumped after Coinbase Global said it would allow users to trade the currency on a platform geared toward more experienced investors. The cryptocurrency initially founded as a joke rose 26% from its Tuesday 5 p.m. ET level to 43 U.S. cents, according to CoinDesk.

In bond markets, the yield on the 10-year U.S. Treasury note edged lower to 1.607%, from 1.613% Tuesday. Yields drop when bond prices climb.

Investors are also monitoring surging commodity prices, which are feeding into those inflation concerns and weighing on sentiment, said Esther Baroudy, a senior portfolio manager at State Street Global Advisors.

"You have got a very, very big recovery going on and it is pushing up prices everywhere for basic commodities," she said. "A lot of it is driven by a roaring economy in the U.S. The manufacturing side of the economy, for example, is absolutely on fire."

Brent crude, the international energy benchmark, rose 1% to $70.96 a barrel, extending gains after OPEC forecast a rebound in demand.

The Fed's beige book report, due at 2 p.m. ET, will offer a view on how businesses are faring and the current economic condition. Investors will be looking for insights into how companies are coping with rebounding consumer demand and supply bottlenecks.

Overseas, the Stoxx Europe 600 edged up 0.2%, on track to notch a fresh closing record.

Major Asian stocks were mixed by the close of trading. Japan's Nikkei 225 rose 0.5%, while Hong Kong's Hang Seng Index fell 0.6%. In mainland China, the Shanghai Composite Index fell 0.8%.

Write to Will Horner at William.Horner@wsj.com

(END) Dow Jones Newswires

06-02-21 0947ET