A strong showing for technology shares helped lift stocks Tuesday to extend Monday's rally on better trade news. The Dow Jones industrial average slipped 0.6 percent as it was depressed by a big selloff in UnitedHealth. The S&P 500 advanced 0.7 percent to recover all of its losses this year. The Nasdaq gained 1.6 percent. Bond yields and oil prices rose while the dollar declined.

Investors appear to be upgrading the economic and financial market outlook after the US and China agreed to suspend their biggest tariffs and work on a trade pact. That has shifted the market narrative toward risk-on. On Tuesday, markets reacted favorably, with relief, to consumer price figures generally lower than expected, which suggested price pressures were diminishing ahead of the tariff shock.

News that Saudi Arabia would buy a big order of chips from Nvidia lifted the AI chipmaker and other semiconductor shares to lead the tech winners. Energy shares had a good day on rising oil prices on hopes for stronger global demand. Meanwhile, on the negative side, United Health dropped 18 percent after it suspended its guidance due to rising medical costs and its CEO quit.

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.