Consumer prices have come in on the high end of Econoday's consensus range the past four reports. Monthly increases of 0.4 percent both overall and for the ex-food ex-energy core won't be pulling forward official rate cuts. Year-over-year rates are not cooling either, at 3.5 and 3.8 percent respectively, the latter nearly twice what the Federal Reserve wants to see.

The US 2-year Treasury yield shot 22 basis points higher to 4.97 percent while the 10-year added 18 points to 4.55 percent (today's monthly 10-year note auction saw poor demand). The jolt higher in yields since Friday's robust employment report points to a general repositioning underway in rate expectations.

The Dow fell 1.0 percent while the Nasdaq fell 0.8 percent. The prospect of higher rates isn't good for housing and construction; real estate stocks were sold off in Wednesday's session. Of note overseas was an outlook downgrade for China by Fitch which is warning of slowing growth for the economy.

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.