Stocks recovered some ground with broad gains Wednesday as the market's worries about valuation eased after Tuesday's selloff. The Dow Jones industrial average gained 0.5 percent, the S&P 500 firmed 0.4 percent, and Nasdaq rose 0.7 percent. US Treasury yields rose, oil prices declined, and the dollar was mostly weaker.

Risk appetite recovered as doubts about the AI trade ebbed and technology shares saw bargain-hunting, in particular from retail investors, while risk assets generally found their footing again. Tesla and Alphabet led the way among megacaps. A better than expected ADP employment report helped to improve market tone as it suggested jobs were weaker but not cratering.

Among sectors, best were airlines, chipmakers, hotels, casinos, apparel retailers, machinery, engineersing & construction, and auto supplies. Lagging were aerospace & defense, waste haulers, regional banks, and machinery.

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.