Stocks seesawed to end flat to higher Thursday in cautious trading with Magnificent Seven stocks mostly providing support. The Dow Jones industrial average and the S&P 500 both firmed 0.1 percent and the Nasdaq rose 0.3 percent. Bond yields declined, the dollar rose, and oil prices surged.

Activity was limited by caution before the key inflation reading due Friday in the monthly personal income and spending report. Expectations center on a flat reading for PCE prices on the month with core PCE prices up 0.1 percent. A mixed set of economic data including weaker than expected durable goods and home sales figures, plus cautious updates from companies about consumer spending, bolstered the view of a slower economy and likelihood of rate cuts. Investors also noted softer consumption figures in revised quarterly gross domestic product figures.

A selloff in Micron after disappointing quarterly results and weakness in Nvidia weighed on microchips and the artificial intelligence trade as investors assess whether the AI trade will continue. Other earnings news came in on the negative side. Walgreens plunged after cutting its guidance and Levi Strauss dropped on a revenues miss.

Best sectors included waste carriers, regional banks, investment banks, hospitals, oil services, communications/networking and software. Lagging were big banks, retail, trucking, drug stores, container board, health & personal care, and credit cards.

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.