Equities advanced Monday with a boost from falling bond yields on President-elect Trump's decision to appoint hedge fund manager Scott Bessent as Treasury secretary. Investors view Bessent as a pragmatic choice likely to limit plans to impose huge tariffs and blow up the budget deficit. Treasuries rallied on the news with yields down 10-12 basis points while stocks were up about 1 percent early before the giving back much of their gains.

The Dow rose 1.0 percent and the S&P 500 and the Nasdaq both rose 0.3 percent. The dollar and oil prices dropped, with oil down on signs of a ceasefire in Israel's conflict with Hezbollah.

Among sectors, rotation out of big technology and megacaps into certain cyclicals and small caps continued. Best sectors included apparel retailers, restaurant chains, autos, builders, banks, chipmakers and airlines. Lagging were precious metals as gold slipped, energy, media, and aerospace & defense.

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.