Renewed strength in AI stocks and a rally in domestic steelmakers lifted equities Monday. The Dow Jones industrial average firmed 0.4 percent, the S&P 500 gained 0.7 percent and the Nasdaq was up 1.0 percent. US longer maturity bond yields rose but shorter maturity yields were stable. The dollar and oil prices rose.

Steelmakers rallied after President Trump imposed 25 percent tariffs on steel imports in addition to existing tariffs, effective Monday. The rest of Trump's latest array of tariffs and tariff threats did not appear to faze the market Monday as investors evidently see them as unlikely to be implemented.

The day's sole economic report, the Federal Reserve's survey of consumer expectations for January, showed inflation expectations stable in the 1-year and 3-year timeframe, which came as a relief after the University of Michigan consumer sentiment survey on Friday reported a dramatic rise in inflation expectations in a preliminary February report. That inflation news helped shorter yields hold steady or move lower, which bolstered growth stocks in particular.

Big technology shares, especially chipmakers, saw dip-buying after recent weakness with Nvidia leading the way along with other AI-linked businesses. In earnings news, McDonalds rallied to help lift the Dow after reporting strong international sales despite weakness in domestic same-store sales.

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.