Major stock indexes edged up for a second straight day Tuesday with economic reports mixed but mostly matching expectations and investors still focused on hopes for rate cuts. The Dow Jones industrial average firmed 0.2 percent, the S&P 500 rose 0.4 percent and the Nasdaq was up 0.3 percent. US Treasury yields declined at the shorter end and rose in the longer maturities. The dollar and oil prices slipped.

Comments from Federal Reserve officials kept rate cut hopes alive, including Fed Governor Philip Jefferson's remark that the job market is facing stress that suggests it needs Fed support. Other officials made similar comments while repeating the line that inflation remains a concern. Economic reports came in mixed with consumer confidence and Chicago PMI data weaker than expected and job openings on the strong side, though not altering the picture of a cooling job market.

The expected government shutdown is getting a lot of notice but markets have not reacted yet given the expectation that any shutdown would prove short and economic damage limited, as has been the pattern in the past.

Among sectors, best were pharma, including Pfizer after an announcement of a pricing deal with President Trump, plus chipmaking equipment, aerospace & defense, telecom, and food. Lagging were homebuilders, financials, restaurant chains, travel & leisure.

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.