Equities rallied broadly Thursday as economic data bolstered the case for a soft landing, and investors maintained hopes for limited further US interest rate hikes. The Dow industrials rose 1.3 percent while the S&P 500 and the Nasdaq both gained 1.2 percent. US Treasury declined while oil prices rallied and the dollar was mixed.

Most sectors advanced. Megacaps led the winners again with Microsoft leading software higher. Surging oil prices powered energy stocks, while homebuilders advanced to lead consumer discretionary after strong results from Lennar. Banks had a good day to lead financials. On the downside, credit cards slipped after bearish analyst comments on American Express. Grocery stores slipped, along with real estate, travel & leisure, and precious metals.

On a busy day for economic data, the market seized on higher than expected US jobless claims and soft industrial production to support the notion that the economy is slowing, to allow the Fed to take a light hand on rates. Meanwhile, decent retail sales figures underpinned hopes for ongoing consumer spending to keep the recovery afloat.

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.