Symbolism, Imagery, Allegory
The horse and the wagon is what sets off the whole story. Marco initially sees it when he's walking down Mulberry Street trying to find something to report back to his dad. He says:
But all that I've noticed,
Except my own feet,
Was a horse and a wagon
On Mulberry Street. (17-20)
The horse and the wagon are pretty unremarkable on their own, but this does not deter Marco, no way. He sees the potential in the horse and wagon—he just knows that he can make this scene better, that with this as his starting place, he can craft a really great story.
He's a go-getter in every sense, and decides that he needs to shake things up a bit in order for them to be interesting:
That can't be my story. That's only a start.
I'll say that a ZEBRA was pulling that cart! (25-26)
And from there, the whole story snowballs into a blazing conflagration of confetti, people from all over the world, and blaring music. The horse and wagon is the seed that plants the whole idea in Marco's mind, though. It's the object set in reality that makes room for all the imaginary things to blossom, and in being such, it's a symbol for the creative potential of even the most ordinary objects and scenes.