Stocks ended narrowly mixed but mostly weaker in sluggish trading Wednesday. The Dow Jones industrial average slipped 0.7 percent, the S&P 500 eased 0.2 percent and the Nasdaq was flat. Bond yields rose while the dollar and oil prices slipped.

Equities trading appears to have shifted into neutral after the market's brisk rally from the August lows. Underlying sentiment remains favorable but buyers have lacked impetus lately apart from big technology favorites like Nvidia, which continues to rise and support the major indexes. The AI trade got another boost Wednesday after an upbeat forecast from Bain on corporate spending on AI.

Small caps and cyclicals lagged, especially financials, along with industrials, materials and consumer discretionary. Energy had a bad day as oil prices slumped on reports Libya's production interruption may be ending. Health care lagged too with Amgen weighing on the sector after disappointing clinical results. Best sectors included communications services, information technology, consumer staples and utilities.

Macro news was limited Wednesday as new home sales topped expectations and mortgage applications rose, predictably, on lower mortgage rates. Late comments from Fed Governor Adriana Kugler repeated the recent Fed line that more rate cuts are coming and the pace depends on the data.

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.