Stocks recovered from the day's worst levels but mostly remained much lower Tuesday after another very disappointing economic report that suggested the economy may be cracking. The Dow Jones industrial average rose 0.3 percent, the S&P 500 fell 0.5 percent and the Nasdaq lost 1.3 percent. US bond yields, the dollar and oil prices all slipped.

Stocks rebounded from morning lows as short-term trading indicators suggested the market was oversold but the main event was a big risk-off move triggered by much worse than expected consumer confidence figures. The news added to the string of distinctly weaker second-tier economic reports starting with Friday's existing home sales and consumer sentiment reports.

The darkening economic picture in tandem with uncertainty stemming from the Trump administration's policy program have fed the view that the economy is set to slow sharply this year. That represents a stark shift from the much sunnier view of the economy's prospects that prevailed after Republicans swept to power in November. Markets are now back to pricing in a Federal Reserve rate cut in June and a second rate cut by year end to head off the gathering weakness.

Among sectors, growth lagged while value and cyclicals fared better. Big technology lagged with Nvidia and Meta among the notable decliners. Energy, software, banks, airlines, trucking and semiconductors had a bad day. Holding up best were home builders, discount stores, food & beverage, pharma, chemicals and managed care.

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.