Stocks slipped Tuesday to extend last week's losses after disappointing inflation news. Many investors apparently view the market as overextended to the upside and due for consolidation.

The Dow Jones industrial average eased 0.2 percent, the S&P 500 fell 0.6 percent, and the Nasdaq lost 0.9 percent. US Treasury yields and oil prices declined while the dollar rose.

Small cap stocks gave back last week's advance. Big technology stocks weighed on the averages with losses in Nvidia ahead of its earnings report. Other chip stocks retreated in sympathy. Super Micro Computer was another notable decliner as the market pared its bets on stocks geared to the artificial intelligence boom.

The Dow drew support from Walmart after it issued stronger than expected guidance for 2025. Among Dow stocks, Caterpillar and IBM had a bad day to offset Walmart's advance.

Among sectors, best were consumer staples and utilities while lagging were technology, communications services, consumer discretionary, financials, energy, and industrials. Vizio and Discover Financial were notable gainers on news the two firms would be acquired by Walmart and Capital One, respectively.

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.