Federal Reserve Chair Jerome Powell gave the long-awaited word that the time has come to cut rates and investors were relieved but not exuberant. The Dow Jones industrial average rose 1.1 percent, the S&P 500 gained 1.2 percent and the Nasdaq advanced 1.5 percent. Bond yields declined, the dollar rose, and oil prices jumped.

Powell's noncommittal stance on the size and number of rate cuts left markets a bit uncertain but the bid for equities was strong and across the board, with good interest in buying Thursday's dip. Short end U.S. Treasuries led the decline in market rates, as usual on Fed cuts, with the 2-year note yield down about 10 basis points and and the benchmark 10-year note down eight basis points.

Chipmakers led stocks higher, along with the rest of the technology space. Nvidia and Tesla were notable leaders. Other big sector winners were real estate, consumer discretionary, energy, and materials. Consumer staples lagged but ended higher.

A much stronger than expected new home sales report contributed to the bid for homebuilders and real estate stocks. New home sales were up a surprising 11 percent on the month in July, presumably in response to lower interest rates.

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.