Equities retreated again Wednesday as the market gave back its gains of late Tuesday amid new Fedspeak and negative company news. The Dow Jones industrial average declined 0.6 percent, the S&P 500 slipped 1.1 percent, and the NASDAQ was down 1.7 percent. US Treasury yields declined, the dollar was mostly better, and oil prices rose.

Equities sold off broadly as risk appetite was hurt by comments from several Federal Reserve officials appearing to amplify the view that inflation remains problematic and rates may be headed higher for longer than markets expect. New York Fed President John Williams, not known as a hawk, repeated a comment made last week by Dallas Fed President Lorie Logan that rates might have to move still higher if the market loosens financial conditions too much.

Alphabet led communications services and megacaps lower after its Bard artificial intelligence software failed an early public test by producing incorrect information. Disappointing guidance and rising inventories at Under Armour tanked retail & apparel stocks. Homebuilders had a bad day despite data suggesting a recovery under way in home sales. Restaurants, utilities, paper & packaging, chipmakers, and grocery stores all lagged. Holding up relatively better were health care, media, aerospace & defense, and waste stocks.

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.