Stocks edged down Wednesday as the market faced consolidative pressure after its recent big gains in cautious trading ahead of US PCE inflation figures due Thursday. The Dow Jones industrial average eased 0.1 percent, the S&P 500 declined 0.2 percent, and the Nasdaq fell 0.6 percent. US Treasury yields, oil prices and the dollar all lost ground.

Another batch of comments from Federal Reserve officials left interest rate expectations unchanged. The market has now scaled back the magnitude of rate cuts expected this year to look for roughly 75 basis points, in line with the Fed's dot plot. Fed officials are saying they see inflation pressures receding but they want confirmation the trend will continue before cutting rates while the economy remains robust.

Declines big tech and megacaps weighed on the major averages Wednesday. Small caps retreated after outperforming this week. Losing sectors included semiconductors, health care, big pharma, regional banks, apparel retailers and department stores. Holding up best were autos, health & personal care, machinery and food products.

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.