Stocks dropped late Wednesday after the Federal Reserve policy statement and Fed Chair Jerome Powell's comments were more hawkish than expected. The Dow Jones industrial average fell 0.8 percent, the S&P 500 dropped 1.6 percent and the Nasdaq lost 1.9 percent. US Treasury yields, oil prices and the dollar all declined.

Megacaps and big technology had a bad day on the Fed news, which obliged investors to scale back expectations for a March rate cut. Equities also suffered from disappointment over results from Alphabet and Microsoft. AMD's results hurt chipmakers. Other big drags on earnings news included homebuilders, building products, credit cards, and regional banks. Holding up better were media and health care.

Tesla had a bad day after a Delaware court voided company founder Elon Musk's pay package. On the positive side, strong results at Paramount buoyed media shares. Stryker lifted medical devices, and beleaguered Boeing bounced back on earnings and revenues beats.

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.