Lack of movement in US debt ceiling talks and worries about rate hikes undercut equities again Wednesday. The Dow industrials fell 0.8 percent, the S&P 500 lost 0.7 percent, and the Nasdaq was down 0.6 percent. US Treasury yields and oil prices rose while the dollar declined.

Ongoing debt ceiling talks showed no progress, a growing concern for risk assets. Meanwhile, the market reacted poorly to comments from Fed Governor Christopher Waller, who said policy-makers need to retain flexibility on whether to raise rates in June, anathema to markets expecting a pause in the rate hike campaign.

Among sectors, only energy managed gains with oil prices up after a surprising drop in US oil inventories for the latest week.Financials, real estate, and industrials lagged the most. Consumer discretionary held up relatively well with a boost from Amazon and from homebuilders after Toll Brothers reported favorable quarterly results.

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.