Stocks weakened Tuesday on profit-taking in megacaps and technology shares that have lifted the major averages to new highs this year. The Dow declined 0.6 percent while the S&P 500 eased by 0.4 percent and the Nasdaq was off 0.3 percent. US Treasury yields were mostly lower while the dollar was mixed and oil prices slipped.

Declines in Broadcom and Nvidia, bellwethers of this year's powerful AI trade, depressed stocks Tuesday. Megacaps including Alphabet, Amazon and Meta came under pressure too.

Mixed economic data dampened sentiment, including a much weaker than expected industrial production report and somewhat weaker retail sales. The soft data helped bond prices recover from early losses, and the lower yields cushioned the equity market decline.

Among sectors, best were health care and communications services while lagging were technology, energy, financials, utilities and industrials.

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.