A respite in the recent run-up in bond yields helped equities recover some ground Thursday. The Dow Jones industrial average rose 0.4 percent, the S&P 500 gained 0.6 percent, and the Nasdaq was up 0.8 percent. US Treasury yields and oil prices declined while the dollar rose.

Among benchmark yields, the US 10-year note fell back about 4 basis points to 4.58 percent on the day, fueling hopes for rates to hold steady after rising this week to levels not seen since the Great Financial Crisis. The view that equities and other risk assets were oversold and sentiment overly bearish fueled a rebound.

Risk appetite drew support from somewhat dovish comments from Chicago Fed President Austan Goolsbee, who made the case for inflation to come down without a significant rise in unemployment. The market apparently did not focus on news of an unexpectedly large decline in pending home sales, a notable downward revision in second quarter personal consumption spending, or another unexpectedly low weekly jobless claims figure.

Equities gains were nearly across the board, with only utilities weakening. Best performers included big technology, airlines, autos, banks, restaurants, health care, and chipmakers. Lagging were energy, pharma, casinos, food & beverage, and apparel.

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.