Stocks ended flat to higher Wednesday in volatile trading with investors keying on US-China trade headlines and mostly positive earnings news. Many stocks retreated from morning highs as the day progressed. Dow Jones industrial average closed flat, the S&P 500 rose 0.4 percent, and the Nasdaq was up 0.7 percent. US Treasury yield rose while oil prices and the dollar fell.

An early positive statement on US-China trade from Treasury Secretary Scott Bessent raised hopes for progress on trade talks but other comments from Bessent and President Trump's threat to stop selling cooking oil to China sent the market back down. Negative headlines on the government shutdown weighed on sentiment too. A soft beige book report, on the other hand, bolstered expectations for Federal Reserve rate cuts, which have been largely offsetting renewed trade fears.

Megacaps including big technology shares and communications services saw bargain-hunting Wednesday after Tuesday's losses though they retreated from the day's highs. Among sectors, financials outperformed after another batch of stronger than expected quarterly results from big banks. Strong results from chipmaker ASML lifted semiconductors and tech. Other outperformers included utilities and real estate. Lagging were materials, industrials 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.