Hopes for an end to the government shutdown lifted risk appetite and stocks Monday. The Dow Jones industrial average gained 0.8 percent, the S&P 500 rose 1.5 percent, and Nasdaq rallied 2.3 percent. US Treasury yields and oil prices rose while the dollar was mostly weaker.

The market reacted favorably to news late Sunday that the Senate had advanced a a compromise measure to reopen the government and appeared likely to give final approval this week, with the House expected to follow suit.

Big technology shares reacted most strongly to the news as they saw bargain-hunting after leading decliners last week. Tesla, Nvidia and Palantir were among the leaders as buyers stepped in on the shutdown news. AI shares got a lift as investors appeared to swing back toward optimism that AI capex has not been overblown and that the bullish case for AI remains intact.

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.