Equities rebounded Friday as investors bought Thursday's dip, with a boost from supportive inflation readings and earnings news. The Dow industrial average gained 0.5 percent, the S&P 500 rose 1.0 percent, and the Nasdaq rallied 1.9 percent. US Treasury yields and the dollar declined while oil prices rose.

Many investors viewed Thursday's pullback as overdone as they downplayed concerns that a modest Bank of Japan move toward tighter policy would weaken demand for risk assets. Friday's better than expected US PCE price index figures bolstered the bull case that inflation is slowing and a soft landing is coming into view.

Megacaps recovered on dip-buying with support from falling bond yields after the inflation report, with Apple, Amazon, Microsoft, and Tesla leading the way. Among big names reporting Friday, Intel rallied after beating earnings expectations and raising its guidance. Newell Brands and Procter & Gamble both jumped after topping earnings and revenues expectations.

Among sectors, best performers included retail/apparel, building materials, homebuilders, chipmakers, telecom, big tech, and hotels, Lagging were drug stores, health care, insurance, utilities, and energy, with the latter off despite rising oil prices.

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.