Equities edged up Friday in muted trading after Thursday's rally to end a very strong week. The Dow Jones industrial average, the S&P 500 and the Nasdaq all firmed 0.2 percent. Bond yields and oil prices declined while the dollar rose.

Underlying sentiment remains favorable and most investors expect more gains ahead with a soft landing and rate cuts coming. For Friday, the upside was capped as disappointing housing starts news and a bearish response to earnings from Applied Materials took the wind out of the rally for now.

Early comments from Chicago Federal Reserve President Austan Goolsbee focused on concern that the employment market could worsen rapidly, a view that conforms with expectations for rate cuts starting next month. Investors also took note of the latest Atlanta Fed GDPNow estimate for third quarter growth at 2.0 percent, down from the 2.9 percent estimate at the beginning of the week.

Most sectors were better, paced by gains in information technology, consumer discretionary, communications services, financials and utilities. Lagging were energy, industrials 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.