Equities ended better Friday with investors reassured by inflation readings that matched expectations. The Dow Jones industrial average gained 1.5 percent, the S&P 500 rose 0.8 percent, and the Nasdaq was flat. Bond yields and oil prices fell while the dollar rose.

The personal consumption expenditures price index, the Federal Reserve's favored inflation gauge, rose an as-expected 0.3% in April from March, which suggested slow disinflation continues. The news bolstered hopes the Fed would be in position to cut interest rates in September or December this year. That helped push down market interest rates with the 10-year note down about 5 basis points on the day and roughly 20 basis points during May.

The market advanced broadly Friday although megacaps and technology shares were sharply lower through most of the day. The Nasdaq was down about 2 percent in the afternoon before dip-buying lifted the Nasdaq in the final hour to end unchanged. Tech stocks were undercut by a selloff in Dell after the computer maker reported disappointing quarterly earnings. Paycom Software was another notable loser after announcing a management departure.

Among sectors, worst performers were information technology, consumer discretionary and communications services. Best were health care, utilities and 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.