A retreat in bond yields and oil prices helped equities rise Tuesday, along with perceptions that the recent selloff has been overdone. The Dow Jones industrial average rose 0.4 percent, the S&P 500 gained 0.5 percent and the Nasdaq firmed 0.6 percent. US Treasury yields and oil prices declined while the dollar was mostly higher.

Bond yields declined for a second day with a prod from a global flight to quality due to the Israel-Hamas war. The market also continued to respond to comments from Federal Reserve officials suggesting the recent runup in bond yields means the Fed's rate hike campaign is ending. Oil prices fell back a bit after their jolt higher Monday on the Mideast news, better news for inflation worries.

Stocks advanced across the board. Best sectors included financials, consumer staples, materials, and consumer discretionary. Energy lagged distinctly as oil prices fell back.

The magnitude of the day's gains was limited as underlying sentiment remains cautious. Fed officials have balanced their recent focus on the impact of rising bond yields with more familiar hawkish language about lingering inflation, and heavy Treasury issuance is likely to bias rates higher.

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.