Stocks weakened Monday as the market consolidated for a second straight day after gains last week. The Dow Jones industrial average fell 0.4 percent and the S&P 500 and Nasdaq both lost 0.3 percent. US Treasury yields, the dollar, and oil prices all rose.

Risk appetite was limited by caution before US economic data later in the week including Friday's personal consumption expenditures price report. Some analysts viewed equities as overbought after setting new record highs in the major stock indexes. Rising market interest rates were a negative with Treasuries hurt in the afternoon following weak results in the monthly 2-year note sale.

Among sectors, big technology shares weakened along with airlines, software, big banks, restaurant chains, machinery, and managed care. On the positive side, best were energy, industrial metals, paper and packaging, telecom, discount retailers and biotech. Small caps had a good day but market skeptics continue to point to the ongoing outperformance of megacaps including the Magnificent Seven as a sign that the rally is narrowly based.

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.