Equities gained across the board Wednesday with an early boost from semiconductors after positive quarterly results from Advanced Micro Devices. The Dow Jones industrial average firmed 0.2 percent, the S&P 500 gained 1.6 percent and the Nasdaq rallied 2.6 percent. Bond yields declined, the dollar was mostly higher and oil prices surged.

The stock market drew support but ultimately did not extend its gains after an as-expected announcement of no interest rate change from the Federal Reserve and Fed Chair Jerome Powell's confirmation that a rate cut was likely to be considered at the September policy meeting if inflation figures maintain their recent trend. Powell repeated the recent line that officials are balancing concerns about inflation with fears about a weakening labor market, with the latter increasingly getting more attention. Bond yields moved down as Powell was speaking with the U.S. Treasury 2-year note yield moving from 4.37 percent when Powell started to 4.27 percent when he concluded.

Megacaps returned to their leading position to help the Nasdaq outperform. Accordingly, best sectors included technology, communications services, consumer discretionary, plus old line firms in financials, real estate, energy, industrials and utilities. Energy stocks advanced as oil prices popped up amid expectations that conflict will escalate between Iran and Israel. Among Dow stocks, best performers included Amazon, Boeing and Caterpillar while Merck lagged.

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.