The bad news is bad news dynamic returned Friday with investors focusing on weakness in the employment report and recession fears. The Dow Jones industrial average declined 1.0 percent, the S&P 500 slipped 1.7 percent, and the Nasdaq plunged 2.6 percent. Bond yields, oil prices and the dollar all lost ground.

Investors keyed on news that nonfarm payrolls rose a modest 142,000 with downward revisions to prior months and focused less on news of a decline in unemployment and higher than expected hourly earnings.

Equities seesawed after comments from Federal Reserve Governor Christopher Waller. They rose initially on a dovish sounding headline reporting Waller's comment that he might support front-loading rate cuts, but the rest of his remarks and other headlines sounded more cautious. The more sober assessment of Waller's views prompted markets to mark down expectations for an aggressive 50 basis point rate move in September, which in turn spurred a bigger selloff in stocks and commodities markets.

Megacaps and big technology shares weighed down the major averages. Tesla was the day's featured loser, down 8.5 percent after its nice rebound Thursday. Other notable decliners included chipmakers, autos and suppliers, financials, and copper & aluminum. There were not many winners but holding up best were real estate investment trusts, home builders, and food & beverage.

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.