Equities rose Monday to extend Friday's bounce with technology and megacaps again leading the way on hopes for a slower pace of US rate increases. The Dow Jones industrial average gained 0.8 percent, the S&P 500 rose 1.2 percent and the NASDAQ rallied 2.0 percent. US Treasury yields and oil prices rose while the dollar was mixed.

Hopes for a more supportive Federal Reserve stance flowed from a report by Nick Timiraos in The Wall Street Journal saying the Fed was likely to raise rates by 25 basis points at the Feb. 1 policy meeting and that policy-makers would discuss the timetable for pausing rate hikes. The market also reacted favorably to news that fewer forecasters polled by the National Association of Business Economists believe the US economy will enter a recession this year.

Among sectors, best were communications services, technology, consumer discretionary, and industrials, while lagging were utilities, pharma, and energy. Tesla was among the day's winners to lead autos higher. Netflix gained to boost streaming media, Wayfair rose on analyst upgrades to lift retail. Catalyst Pharmaceuticals was the day's featured loser to weigh on pharma.

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.