Stocks advanced Wednesday after an as-expected rate cut and guidance pointing to stable rates as investors still sensed dovish elements in the Fed news. The Dow Jones industrial average gained 1.1 percent, the S&P 500 rose 0.7 percent and the Nasdaq firmed 0.3 percent. US Treasury yields and dollar was declined while oil prices rose.

Investors reacted positively to Fed Chair Jerome Powell's comment that a rate increase was no policy-maker's base case, and to the Fed decision to stop shrinking its balance sheet and to resume purchases of Treasuries. Treasuries rallied on the Fed news, which means bond yields declined, a boost for stocks and other risk assets.

Among sectors, financials were among the day's top performers, paced by JP Morgan on dip-buying after its selloff on Tuesday. Consumer discretionary was strong with a boost from Tesla and Amazon. And industrials outperformed with support from GE Vernova. Other winners included health care, energy and materials.

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.