Equities mostly advanced Thursday after a batch of surprisingly strong economic reports boosted hopes for a soft landing, though rising interest rates undercut megacap growth stocks. The Dow industrial average rose 0.8 percent; the S&P 500 firmed 0.4 percent, and the Nasdaq was flat. US Treasury yields, the dollar, and oil prices all rose.

An unexpected upward revision in US gross domestic product for the first quarter and a drop in jobless claims in the latest week played into the narrative that the economy remains surprisingly resilient. That helped lift demand for sectors like materials, industrials, and financials. Small caps led the day's advance as investors rotated into a sector that has lagged as megacaps led the way higher.

News that big US banks passed the latest Federal Reserve stress test bolstered banks, especially Wells Fargo. Chipmakers got a lift after Micron said chip demand has bottomed out. On the downside, lagging were consumer discretionary, information technology, communications services, and consumer staples.

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.