Major stock indexes gained Friday as the market welcomed as-expected US inflation figures and as three days of downward correction gave way to a bounce. The Dow Jones industrial average gained 0.7 percent, the S&P 500 rose 0.6 percent and the Nasdaq was up 0.4 percent. US Treasury yields declined in shorter maturities and rose at the long end. The dollar weakened and oil prices gained.

The Federal Reserve's favored inflation measure, the personal consumption expenditures price index, showed an as expected 0.3 percent rise on the month and core PCE prices rose 0.2 percent, in line with expectations. That came as a relief after a series of stronger than expected economic reports this week shook the prevailing view that multiple rate cuts are coming. The market appeared to welcome personal income figures that topped expectations and pointed to economic resilience.

Megacaps had an off day to restrain the major indexes but the broad market advanced. Among sectors, energy, industrials, financials, health care and materials were among the best performers while consumer staples, technology and communications services lagged

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.