Equities improved Friday as the market added to its recent advance after an upbeat employment report left intact expectations for a soft landing. The Dow Jones industrial average and the S&P 500 both gained 0.4 percent and the Nasdaq rose 0.5 percent. US Treasury yields and oil prices rose while the dollar was mixed.

Employment figures came in on the high side of expectations, with an unexpected decline in the jobless rate and higher than expected hourly earnings figures. Bond yields rose in response but equities players evidently remain convinced a Federal Reserve pivot to easing is coming next year. News of an unexpected drop in inflation expectations added to the view that inflation has been tamed even growth continues.

Among sectors, communications, consumer staples, and health care lagged while best performers were energy, materials, industrials, financials, and technology. Tech stocks have benefited from the return of the AI trade, with Google the latest to see an AI boost after its Gemini announcement. Energy stocks got a lift as oil prices rebounded on the solid jobs report and news that the Energy Department is planning to buy more crude for the Strategic Petroleum Reserve.

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.