Equities ended narrowly mixed Wednesday after the Federal Reserve policy announcement and comments from Fed Chair Jerome Powell matched expectations. Powell's comment early in his press briefing that the Fed might pause its rate increases in September generated a short-lived rally but the advance faltered quickly as he also said the Fed could raise rates in September. He repeated there had been no change in the Fed's data-dependent stance, that the labor market remains tight, that it has a ways to go before inflation is under control, and that it would make policy on a meeting by meeting basis.

The Dow industrial average firmed 0.2 percent, the S&P 500 was flat, and the Nasdaq eased 0.3 percent. US Treasury yields, the dollar, and oil prices all declined after two days of gains.

Weakness in most megacaps depressed the major averages, offset somewhat by a rally in Alphabet on strong quarterly results. Technology shares lagged as Microsoft had a bad day after the market reacted badly to news of slowing Azure sales.

Among other sectors, financials outperformed as regional bank stocks were buoyed by hopes for more mergers after news Banc of California would buy PacWest, its troubled competitor. Other strong sectors included communications services, real estate, utilities, and industrials. Lagging were energy, consumer discretionary, and materials. Amazon sagged to dampen consumer discretionary.

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.