Equities sank Thursday with losses in megacaps and chipmakers spurring widespread risk-off sentiment. The Dow Jones industrial average fell 0.9 percent, the S&P 500 dropped 1.9 percent and the Nasdaq plunged 2.6 percent. Bond yields declined, oil prices rose, and the dollar was mixed versus major currencies.

Disappointing results from Meta and Microsoft hit megacaps and the Nasdaq especially hard. Oil prices jumped on a report that Iran is preparing retaliation against Israel for its latest strike, which in turn hurt risk assets. Energy shares benefitted from the move as well as utilities and consumer staples in the overall safe-haven trade. On the downside, worst performers included information technology, real estate, industrials, and consumer discretionary.

Uncertainty ahead of the election is a big overhang for risk appetite, along with rising bond yields on the view that Republicans may sweep the White House and both houses of Congress. Headed into the employment report Friday, traders were whispering about a rise of 130,000 in nonfarm payrolls rather than the 105,000 median forecast among economists. The jobs report is expected to be distorted by strikes and hurricanes during October, which will make it harder to discern the underlying trend.

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.