Stocks sagged Thursday for a third day as the market did not hold onto early gains amid caution around earnings and uncertainty around the midnight deadline set by the Trump administration to reimpose reciprocal tariffs on many countries. The afternoon passed with no clarity from the White House on how this will unfold.

The Dow Jones industrial average decreased 0.7 percent, the S&P 500 eased by 0.4 percent, and the Nasdaq was flat. US Treasury yields and the dollar rose while oil prices slipped.

A strong showing for megacaps with good gains for Meta and Microsoft after earnings underpinned the major averages and sentiment generally. Weakness in pharma was a notable drag on the markets after President Trump threatened drugmakers if they don't reduce prices. Caution and uncertainty over trade was a major factor as numerous countries face a snapback in tariff rates to their April 2 levels in the absence of deals with the US. Several major countries have reached tentative deals while the president has issued a series of ad hoc threats to several others.

Sentiment continued to recoil from perceived hawkishness in Federal Reserve Chair Jerome Powell's comments on Wednesday. There was also caution ahead of the monthly employment report due for release on Friday. Economic data on Thursday included personal consumption expenditures price figures that added to inflation worries, a distinct negative.

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.