Bargain-hunting after days of losses lifted equities to solid gains Friday despite rising bond yields. The Dow rose 0.8 percent, the S&P 500 advanced 1.3 percent and the Nasdaq rallied 1.8 percent. Oil prices rose and the dollar declined.

Megacaps and big technology shares, which have been beaten up since the year end holidays, led the winners to boost the major averages. Best sectors included energy, communications services, technology and consumer discretionary. Shares including Tesla, which is still down nearly 9 percent over the last five days, jumped by 8 percent Friday as traders saw it and other momentum trades as oversold.

The ISM manufacturing report, the main macro news event Friday, came in on the strong side of expectations, which lifted bond yields. Investors also noted the suggestion in the report that manufacturing is poised to recover further as 2025 unfolds, while the service sector remains robust.

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.