Stocks faced selling pressure through most of the day Monday amid rising bond yields and quarter-end consolidation but equities rallied late in a short squeeze to cut the losses and move mostly into positive territory. The Dow Jones industrial average was flat while the S&P 500 and the Nasdaq both rose 0.4 percent. Bond yields, the dollar and oil prices rose.

Bond yields started off higher after global bond markets were hurt by disappointing German and Italian consumer price figures. Yields moved still higher late in the day after the market disliked the cautious tone of Federal Reserve Chair Jerome Powell's comments. Powell said the Fed is in no rush to cut rates and that the base case calls for 50 basis points in cuts this year, assuming the economy performs as expected. As markets are priced for at least 75 basis points this year, Powell's remarks generated reflexive selling, but as markets still expect aggressive rate cuts, the selling gave way to bargain-hunting, and major indexes went out at the day's best levels.

Among sectors, best were communications services, health care, energy, information technology and real estate. Worst performers were materials and consumer discretionary.

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.