Equities bounced back Wednesday as bond yields retreated from highs reached overnight. The Dow Jones industrial average rose 0.4 percent, the S&P 500 gained 0.8 percent, and the Nasdaq advanced 1.4 percent. US Treasury yields declined, the dollar rose, and oil prices plunged.

Equities appeared oversold on a short-term basis and ripe for a bounce, as were US Treasuries after the long bond yield touched a high of 5 percent and the 10-year note 4.88 percent overnight.

Big technology shares and megacaps generally had a good day to lead the recovery effort. Most sectors were higher, led by consumer discretionary, information technology, communications services, and financials. Lagging were utilities and energy, which fell back as oil prices tanked on worries about slowing demand as interest rates rise. West Texas crude fell more than 5 percent for its worst day since September 2022.

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.