Rising interest rates and disappointing earnings combined to whack stocks again Tuesday. The Dow Jones industrial average fell 2.1 percent, the S&P 500 lost 2.0 percent, and the NASDAQ dropped 2.5 percent. US Treasury yields and the dollar rose while oil prices declined.

A repricing of still more Federal Reserve rate increases continued to hurt equities, with megacaps under notable pressure. US 2-year note yields have risen more than 60 basis points so far in February in line with expectations for a federal funds rate around 5.5 percent. Sentiment also suffered from escalating tensions between the US and Russia, and between the US and China over Ukraine and an array of concerns.

Meanwhile, much weaker than expected results from Home Depot and a warning from Walmart renewed concern about prospects for recession and slower consumer spending. Among sectors, financials, consumer discretionary, real estate, and communications services lagged the most.

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.