Weakness in many megacaps restrained the major stock indexes Tuesday even as market breadth was positive amid falling market interest rates. The Dow Jones industrial average rose 0.2 percent, the S&P 500 gained 0.3 percent, and the Nasdaq was flat. Bond yields declined while the dollar and oil prices rose.

Bond yields slipped after much weaker than expected retail sales figures with coupon yields down 5 to 6 basis points. The soft retail report bolstered the view that consumer spending and inflation pressures are fading, and enhanced expectations for Federal Reserve rate cuts starting in September. The market reaction was somewhat limited as major indexes are already trading near record highs and traders were cautious ahead of a U.S. holiday close Wednesday. Several Fed speakers highlighted the view that inflation is moving in the right direction but policy-makers appear in no rush to move.

Big technology shares had a bad day with Nvidia the notable exception to the upside. Best sectors included energy as oil prices perked up, plus financials, health care, real estate, materials and technology. Lagging were communications services, consumer discretionary and utilities.

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.