Stocks extended Monday's rally with broad-based gains on Tuesday as investors started 2026 off in a bullish mood. The Dow Jones industrial average gained 0.9 percent to close at another new record above 49,000. The S&P 500 firmed 0.6 percent to set a record closing high, and the Nasdaq was up 0.7 percent. US Treasury yields and the dollar rose while oil prices fell.

Cyclical/value sectors have been big winners at the start of the year as the rally that was centered in Magnificent Seven and other big growth momentum plays broadened out as activity picked up after the year-end holidays.

Markets have shrugged off concerns that President Trump's actions in Venezuela and threats to take over other countries would disrupt markets or economies. Oil prices retreated after Mondays gains to dampen energy stocks, one of the few sectors showing weakness.

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.