Stocks weakened nearly across the board Thursday as the market consolidated for a third consecutive day after their run to record highs, amid valuation worries. The Dow Jones industrial average slipped 0.4 percent while the S&P 500 and the Nasdaq both lost 0.5 percent. US Treasury yields, the dollar and oil prices all rose.

Surprisingly strong US economic reports lifted bond yields as traders scaled back expectations for multiple rate cuts, another negative for stocks, though underlying economic resilience was supportive. The reports included much lower than expected jobless claims for a second straight week, and an upgrade to second quarter gross domestic product, including stronger consumer spending. Investors are watching closely the next major economic report, personal income and spending figures due on Friday including the Federal Reserve's favored inflation measure.

Megacaps and big technology shares came under pressure, giving back more of the spectacular gains that have led the major stocks indexes to recent highs. Among sectors, only energy saw gains as oil prices rallied. Worst performers included consumer discretionary, communications services, information technology, industrials, health care and financials.

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.