More positive noises on prospects for a debt ceiling deal helped equities recover to end higher Thursday. The Dow industrials rose 0.3 percent, the S&P 500 gained 0.9 percent, and the Nasdaq gained 1.5 percent.. US Treasury yields rose, the dollar was mixed, and oil prices fell.

Stocks faced selling pressure in the morning after hawkish comments from Federal Reserve officials pushed bond yields higher in the morning, alongside a larger than expected drop in jobless claims and better Philadelphia Fed manufacturing numbers. Investors focused on Dallas Fed President Lorie Logan's comment that the Fed has not yet seen the progress it needs to see on inflation, and that the data do not yet support skipping a rate increase in June.

On the positive side, stocks rebounded in the afternoon after House Speaker Kevin McCarthy's comment that negotiators could reach agreement on a debt ceiling extension to be voted on in the House next week.

FANMAGs outperformed to lead the market higher. Among sectors, credit cards, restaurants, streaming media, and chipmakers were the best performers. Health care, utilities, precious metals, drug stores, and health & personal care stocks lagged.

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.