Widespread buying with extra strength in megacaps boosted equities in thin trading Tuesday as the fabled Santa Claus rally appeared. The Dow gained 0.9 percent, the S&P 500 rose 1.1 percent and the Nasdaq was up 1.4 percent. US Treasury yields were flat to lower, and the dollar and oil prices rose.

Consumer discretionary shares led the winners, paced by Amazon and Tesla. Big tech had a good day with megacaps Apple and Microsoft advancing alongside semiconductors including AI bellwethers Broadcom and Nvidia. Bond prices were mostly better through the day with a boost from a well-received 5-year note auction.

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.