Equities ended higher Tuesday in volatile trading as investors appeared mostly relieved that Federal Reserve Chair Jerome Powell did not take a more hawkish stance in the day's featured appearance. The Dow Jones industrial average rose 0.8 percent, the S&P 500 gained 1.3 percent, and the NASDAQ was up 1.9 percent. US Treasury yields rose, the dollar was mixed, and oil prices surged.

After Friday's remarkably strong US employment figures, investors braced for Powell to use an interview at the Economic Club of Washington to push back on the market view that interest rates are peaking. But when Powell's initial comments appeared to downplay concerns about overheating, the market popped up, only to fall back into negative territory as he repeated the Fed's mantra that rates may need to rise more and stay high longer, depending on the data. A late round of buying centered in megacaps lifted the major stock indexes to the day's highs as investors came around to the view that Powell's comments showed the jobs report has not altered the Fed's thinking, though another blowout jobs report might.

Among sectors, best were energy, financials, materials, information technology, and communications services. Energy was the day's leader as crude oil prices extended Monday's gains to reverse last week's losses.

Lagging were consumer staples, utilities, and real estate. The market appeared to find buyers around support at 4,100 on the S&P 500. Google and Microsoft were big winners amid favorable publicity around their new artificial intelligence offerings.

Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.

Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.