Stocks advanced for a second day on Wednesday on President Trump's pledge not to fire the Federal Reserve chair and his comments that he expects to reach a trade deal with China and cut tariffs. The Dow Jones industrial average rose 1.1 percent, the S&P 500 gained 1.7 percent and the Nasdaq was up 2.5 percent. Bond yields were mostly higher with the yield curve flattening for a second day as it unwound Monday's steepening. The dollar rose and oil prices fell.

The Trump comments spurred a morning rally in risk assets but the move reversed by about half after Treasury Secretary Scott Bessent's more cautious comments about any US-China trade pact.

Stocks saw broad-based gains with growth sectors outperforming value/cyclicals. Investors appear cautious on prospects for progress on US-China trade amid reports that Chinese President Xi is not taking Trump's calls.

Among sectors, best were real estate, health care, materials, financials, consumer discretionary, technology, and communications services. Lagging were consumer staples and energy.

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.