An advance in megacaps and the AI trade buoyed stocks Monday with the rest of the market mixed but mostly better in rathe featureless trading. The Dow Jones industrial average eased 0.1 percent, the S&P 500 firmed by 0.4 percent, and the Nasdaq was up 0.7 percent to a new record close. US Treasury yields, the dollar, and oil prices all rose.

Underlying sentiment remains bullish on the view that rate cuts are coming even as the economy remains relatively resilient. The government shutdown has left the market unfazed, and reaction was very limited to rising interest rates Monday after an overnight surge in Japanese government bond yields.

Advanced Micro Devices was the day's big winner on news of a partnership with Open AI. Among megacaps, Tesla, Meta and Alphabet led the way higher. Among sectors, best were technology, energy, consumer discretionary, communications and materials. Lagging were consumer staples, financials, health care and real estate.

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.