Stocks rebounded Thursday with broad dip-buying after Wednesday's selloff. The Dow Jones industrial average rose 1.0 percent and the S&P 500 and the Nasdaq both gained 1.3 percent. US Treasury yields and oil prices declined while the dollar rose against most currencies.

Megacaps were among the best performers as they were hardest hit Wednesday amid disappointment over the Federal Reserve's policy stance, which suggested rate cuts would not come as early as many investors hoped. Still, buyers Thursday noted the Fed statements indicated rate cuts are coming this year, and expectations for a soft landing remain intact. Big technology shares were buoyed by expectations for strong quarterly results after the close.

Among sectors Thursday, best were consumer discretionary, communications services, technology, industrials, and materials. Financials lagged as bank stocks remained under pressure after New York Community Bank swung to a loss and cut its dividend Wednesday. The wider market has not seen fallout from bank contagion worries as analysts generally view risk around NYCB as isolated even as officials have expressed concern over problems with commercial real estate.

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.