Equities bounced back Thursday after Wednesday's inflation fright as risk assets got a lift from a delay in President Trump's threat to impose across the board reciprocal tariffs. Markets were also bolstered by analysis of the day's producer price report that suggested a more benign inflation picture than the market feared.

The headline PPI-FD report came in hotter than predicted but the PPI-FD ex-food and energy matched expectations. What's more, the view took hold in the market that PPI-FD core components that feed into the Federal Reserve's preferred inflation measure, the PCE core price index, pointed to a lower rise in PCE prices, good news for the Fed. After the bad news Wedesday from the CPI, Fed Chair Jerome Powell on Wednesday said he would watch the PPI-FD report as precursor to PCE prices, and bulls seized on the PPI outcome.

Meanwhile, on the tariff front, markets were bracing for Trump to announce actual reciprocal tariffs on US trading partners on Thursday, and there was widespread relief when he pushed back any implementation to April.

The Dow Jones industrial average gained 0.8 percent, the S&P 500 rose 1.0 percent, and the Nasdaq rallied 1.5 percent. US bond yields and the dollar fell while WTI crude oil prices edged up. Among sectors, big technology had a great day to help the Nasdaq outperform. Chipmakers outperformed. Notable winners included Meta, Nvidia, and Tesla, the momentum favorites.

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.