Equities rose Tuesday with a boost from consumer price figures that generally matched expectations in showing lower price pressures. The Dow industrials rose 0.4 percent, the S&P 500 gained 0.7 percent, and the Nasdaq advanced by 0.8 percent. US Treasury yields and oil prices rose while the dollar was mixed.

News that consumer prices rose 4.0 percent in May from a year ago, down from 4.9 percent in April, appeared to confirm expectations that the Federal Reserve would announce no rate change Wednesday, as expected. The market narrative in vogue sees a soft landing unfolding as inflation slows and the Fed takes a relatively light hand in further rate increases.

Cyclicals fared best Wednesday given hopes for ongoing growth rather than recession, with small-caps and value stocks outperforming. Best performers included energy, financials, industrials, and materials, plus information technology, and consumer discretionary.

Energy advanced on an uptick in oil prices, and materials also got a lift from Chinese rate cuts and hopes for more expected stimulus ahead. A rally in Tesla shares and separate strength in cruise lines paced consumer discretionary. Nvidia broke above $1 trillion valuation to lead a rally in chipmakers. Only utilities suffered declines.

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.