Stocks lost ground Thursday as investors reacted to big technology earnings and hawkish sounding comments Wednesday from Federal Reserve Chair Jerome Powell. The Dow Jones industrial average slipped by 0.2 percent, the S&P 500 lost 1.0 percent, and Nasdaq dropped 1.6 percent. US Treasury yields and the dollar rose while oil prices declined.

Reaction was limited to an as-expected US-China trade deal but markets continued to stew over Powell's comment that investors should not assume a rate cut is coming in December, and that the Fed remains data dependent even if it lacks most of the usual economic reports.

Big tech stocks were mixed with Meta the featured loser after investors disliked the much faster projected capex spending for 2026 versus 2025, news that highlighted some investors' worry that the AI trade has gone too far. Alphabet, on the other hand, was the day's featured winner on AI-related wins including its faster Google cloud growth.

Among sectors, best were pharma, paced by Eli Lilly after upbeat results, plus health & personal care, cruise lines, financials, homebuilders, housing-related retail, and road & rail. Lagging were restaurant chains, managed care, steel, telecom, and airlines.

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.