Optimism about a possible deal on the debt ceiling and a rebound in regional bank shares lifted equities Wednesday with cyclicals leading. The Dow industrials and the S&P 500 both rose 1.2 percent and the Nasdaq gained 1.3 percent.. US Treasury yields, the dollar, and oil prices all rose.

Risk-on sentiment flowed from comments from President Biden and from congressional leaders, including Biden's comment Wednesday that he was confident the two sides would agree on a budget deal and avoid default.

Regional bank stocks advanced after Western Alliance, one of the banks in the spotlight, gave a positive update on deposit growth. Target's upbeat earnings report was another big positive for investors who have been concerned about slowing consumption.

Among sectors, best were industrials, materials, consumer discretionary, energy, and financials. Lagging were utilities, consumer staples, and health care.

Among consumer discretionary shares, Wynn Resorts rose after an analyst upgrade, and Tesla advanced after Elon Musk spoke of possible new models.

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.