Momentum stocks fell back Tuesday to weigh on the Nasdaq and S&P 500 while the broader market and value/cyclical stocks outperformed. The Dow Jones industrial average rose 0.7 percent, the S&P 500 eased 0.3 percent, and the Nasdaq was down 1.1 percent. Bond yields declined while the dollar and oil prices rose.

Nvidia and names linked to the artificial intelligence trade came off on more profit-taking, not surprising given their recent run. Among value stocks, best were big oil, aluminum, department stores, railways, airlines, parcels & logistics and other sectors that have been neglected given the focus on technology lately. Lagging were software, internet stocks, cosmetics, technology hardware and steel.

On a quiet summer day, activity was limited ahead of news later in the week including jobless claims and personal consumption expenditures inflation figures on Friday. Investors are watching how the market absorbs U.S. Treasury 2-year, 5-year and 7-year notes this week.

Some market observers are focused on the view that only a handful of stocks have been behind the rally lately and the argument that these stocks are over-stretched. Seasonal factors are seen negative during late June, better headed into July.

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.