Equities rebounded and ended near the day's best levels Friday with bank stocks recovering from early steep losses as contagion fears linked to Deutsche Bank appeared to ease. The Dow industrials rose 0.4 percent, the S&P 500 gained 0.6 percent, and the Nasdaq composite was up 0.3 percent. US Treasury yields declined as Treasuries remained in demand. The dollar was mostly lower and oil prices fell.

Defensive stocks fared best including big pharma, utilities, real estate investment trusts, and food & beverage. Financials suffered though many came off their worst levels, with regional bank stocks seeing a distinct recovery after days of losses. Consumer discretionary and information technology stocks lagged. Airlines, chipmakers, electric vehicles, and fintech stocks had a bad day.

Investors appear to have priced out any further Federal Reserve interest rate increases and look for about 125 basis points of rate cuts by year end, largely in response to fallout from banking problems. In contrast, Fed officials speaking Friday stuck to the line that inflation is the Fed's primary concern, and that recession remains unlikely.

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.