Equities recovered Friday after Thursday's selloff with a boost from lower bond yields in quiet pre-weekend trading. The Nasdaq outperformed to set a record high as Nvidia continued to lead the artificial intelligence trade.

The Dow Jones industrial average ended flat, the S&P 500 rose 0.7 percent, and the Nasdaq was up 1.1 percent. Bond yields declined while the dollar and oil prices rose.

Downward revisions for consumer inflation expectations in the final University of Michigan consumer sentiment report for May fueled a modest rally in US Treasuries to depress bond yields, which helped megacaps outperform.

Best sectors included financials, consumer discretionary, consumer staples, materials and utilities. Chipmakers
outperformed in the afterglow from Nvidia's latest blowout report, with Nvidia, Advanced Micro Devices and Intel leading. Megacaps Meta and Netflix rallied too. Lagging were health care and energy.

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.