Stocks gave back some of Wednesday's rally on Thursday amid profit-taking centered in megacaps after their strong gains. The Dow Jones industrial average and the S&P 500 both eased by 0.2 percent and the Nasdaq lost 0.9 percent. US bond yields and oil prices declined while the dollar was mixed.

Economic reports gave mixed signals with retail sales coming in close to expected, jobless claims much higher than expected, and the Philadelphia Fed manufacturing report much stronger than anticipated. Meanwhile, Fed Governor Christopher Waller's dovish remarks in the morning tended to push Treasury yields lower as he revived market hopes for more than one rate cut in 2025. Chicago Fed President Austan Goolsbee, in contrast, came across somewhat more hawkish in the afternoon when he said the Fed would have to be patient about cutting rates.

Among sectors, real estate, energy, industrials, utilities and health care outperformed while consumer discretionary, technology and communications services lagged. In technology. Apple and Nvidia were notable decliners.

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.