Stocks began the holiday week with a continuation of the positive sentiment seen in the second half of last week, with early morning gains followed by consolidation at moderately higher levels amid few market moving events. The Dow Jones industrial average firmed 0.5 percent, the S&P 500 gained 0.6 percent and the Nasdaq advanced 0.5 percent. US Treasury yields rose and the dollar fell, while oil firmed and gold jumped to record highs.

Sector gains were led by materials, financials, industrials, and energy, while consumer staples was the only sector with a loss on the day. Nvidia and Tesla were the strongest performers among the magnificent seven stocks, with the former benefitting from news that the company will begin shipping its second most powerful chip the H200 to China in February.

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.