Risk-off sentiment drove stocks down Tuesday ahead of Federal Reserve Chair Jerome Powell's appearance Wednesday. The Dow Jones industrial average and the S&P 500 both lost 1.0 percent and the Nasdaq dropped 1.7 percent. US Treasury yields, the dollar and oil prices all fell.

High-flying megacap stocks led the way down. Apple and Tesla were notable losers amid concerns over slowing sales in China. Alphabet fell too amid concern that it is losing the artificial intelligence competition to other big tech rivals. Big chipmakers had a terrible day, paced by losses in Broadcom and Intel, as investors took profits after their big recent rally.
Signs of risk-off came as bitcoin, the ultimate speculative play, fell back dramatically from record highs set earlier in the day.

Stocks sensitive to rising interest rates suffered Tuesday, including real estate and utilities, as investors fret over possible hawkish disappointment from Powell's congressional testimony starting at 10 am ET Wednesday. The market also appears wary ahead of US employment figures due on Friday after a series of upside surprises from the jobs market.

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.