Equities sagged Tuesday as Home Depot's bearish sales guidance and uncertainty around US debt ceiling talks weighed on risk appetite. The Dow industrials firm fell 1.0 percent, the S&P 500 lost 0.6 percent, and the Nasdaq was down 0.2 percent. Relative strength in megacaps helped the Nasdaq outperform. US Treasury yields rose while the dollar and oil prices fell.

Investors reacted badly to Home Depot's warning as it added to the narrative that consumers are pulling back. This came alongside a somewhat mixed US retail sales report.

Markets were awaiting signals from the meeting late Tuesday at the White House involving congressional leaders and President Biden. There was no news ahead of the 4 pm US market close, which left investors to cut risk at the end of the day.

Among sectors, information technology, communications services, and consumer discretionary outperformed while industrials, materials, energy, real estate, and consumer staples lagged.

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.