Equities rose for a second straight session Tuesday on declining US bond yields, favorable company news and relief that President Trump did not impose heavy import tariffs on the first day of his administration. The Dow Jones industrial average rose 1.2 percent, the S&P 500 gained 0.9 percent and the Nasdaq was up 0.6 percent. US bond yields, oil prices and the dollar all declined.

Stocks and bonds both gained after Trump did not deliver immediately on threatened tariffs, in particular against Chinese goods. Trump later said tariffs would go into effect on Feb. 1 for Mexico and Canada and many observers expect tariffs on Chinese goods soon as well. The market reacted favorably to a report that Trump would announce a huge investment in AI infrastructure. Oracle was a notable winner on the news.

Earnings reports helped too, including Schwab, which rallied after a big earnings beat. 3M was another winner after positive guidance. On the downside, Apple slipped after an analyst downgrade. Among sectors, materials, industrials, consumer discretionary and utilities outperformed while energy lagged as oil prices slipped.

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.