Equities slumped Tuesday as last week's risk-off selloff resumed in response to rising market interest rates and weaker than expected US economic reports. The Dow Jones industrial average fell 1.1 percent, the S&P 500 lost 1.5 percent, and the Nasdaq was down 1.6 percent. US Treasury yields and oil prices rose while the dollar declined.

Unexpectedly large declines in US home sales and consumer confidence added to market worries about recession at the same time that rising oil prices and hawkish Federal Reserve comments played on concern about rising rates. JP Morgan CEO Jamie Dimon's comment that the Fed may well need to push rates to 7 percent added to the bearish mood. Minneapolis Fed President Neel Kashkari, a former dove, added to worries about the Fed's stance by saying he saw a 40 percent chance rates would need to move significantly higher in light of sticky service price inflation. Kashkari said he sees a 60 percent chance the Fed's past rate increases will suffice to bring inflation down to target and achieve a soft landing.

Equity losses were across the board with energy holding up best amid rising oil prices. Megacaps had a bad day to lead the selloff and weigh on the major averages. Among sectors, worst were information technology, industrials, real estate, consumer discretionary, and utilities. Among consumer discretionary stocks, Amazon dropped 4 percent on news the Federal Trade Commission was charging the retail giant with monopolistic practices.

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.