Equities extended their bounce Thursday after Wednesday's huge rally on the Trump victory in the presidential election. The Dow Jones industrial average was flat, the S&P 500 rose 0.7 percent and the Nasdaq gained 1.5 percent. Bond yields declined while the dollar and oil prices rose.

Bullish sentiment flowing from the surprisingly quick and decisive Trump victory continued to lift stocks and the dollar amid expectations for faster growth and lower taxes. Interest rates that rose Wednesday retreated in a corrective move after bears took profits on the big run-up in yields due to the Trump victory, which is expected to lead to higher inflation and higher rates generally.

Rates continued lower in the afternoon after an as-expected 25 basis point rate cut from the Federal Reserve and comments from Fed Chair Jerome Powell that suggested more rate cuts are coming, depending on incoming economic reports. Tier-one date releases will be in focus next week including consumer prices and producer prices, and any more information on the Trump administrations policy plans.

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.