Rotation out of megacaps and chipmakers weighed on the major averages Monday while the broad market fared better and cyclicals perked up. The Dow Jones industrial average rose 0.2 percent, the S&P 500 eased 0.3 percent and the Nasdaq dipped 0.9 percent. Bond yields rose, the dollar declined, and oil prices surged.

Activity was light with many market participants on holiday headed into the Labor Day weekend. The day's price action reflected investors trimming positions in semiconductors and big technology shares before earnings due Wednesday from Nvidia, the big tech bellwether. Nvidia and Tesla gave back some of Friday's big gains.

Comments from San Francisco Fed President Mary Daly echoed Fed Chair Jerome Powell's remark that the time has come for rate cuts, but like Powell, Daly would not spell out what kind of rate cuts are coming. Meanwhile, Richmond Fed President Tom Barkin was quoted saying he prefers to proceed slowly on rates to see how the economy responds.

Some big retailers are due to release their quarterly results this week, including Abercrombie & Fitch, Nordstrom, Kohl's, Best Buy, and Lululemon, with the market keying on any commentary on consumer spending.

Energy stocks were among the day's best performers as oil prices rallied after one of Libya's rival governments said it would shut down oil exports, and as investors fretted over Middle East instability. Other outperforming sectors included food & beverage, industrial metals, media, insurance, chemicals, railways and building products. Lagging were autos, trucking, department stores, airlines, cosmetics and casinos.

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.