Most stocks turned lower Friday in quiet trading as the market gave back some of the gains that propelled major indexes to record highs a day ago. The Dow Jones industrial average fell 0.8 percent, the S&P 500 lost 0.1 percent, and the Nasdaq was up 0.2 percent. US Treasury yields, oil prices and the dollar all declined.

Strength in megacap shares including Nvidia and Alphabet prevented larger declines. Still, the market was ending with gains on the week and underlying sentiment remained bullish as investors insisted on viewing the Federal Reserve's policy statements this week as very market-friendly. It will be interesting to see whether Fed Chair Jerome Powell and other speakers due to appear next week choose to push back against the prevailing market view.

Positive economic surprises continued this week, including better than expected Philadelphia Fed manufacturing figures, much stronger existing home sales, and benign jobless claims. All fed the hopeful narrative that the economy remains robust even as inflation pressures continue to ease.

Among sectors Friday, best performers included pharma, cruise lines, hotels, aerospace, health & personal care, and parcels & logistics. Lagging were energy, chemicals, road & rail, restaurant chains, EVs, banks and credit cards. Lululemon and Nike had a bad day after disappointing quarterly results, and Tesla led EVs down.

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.