Neither tires nor wheels are perfectly round and perfectly uniform balance. Many (not all) brands of tires have yellow and/or red dots on the tires from the factory inspection. Some wheels have dimples or other markings at the low point of the wheel's eccentricity.
Tires are measured and marked from the factory indicating their light spot, and for some tires with their high point for their radial runout/radial force variation.
Yellow indicates the lightest spot on the tire.
Red indicates the high point for the radial runout/radial force variation.
The former is a measurement of weight, while the latter is a measurement of roundness.
Yellow dot only: Align to valve stem
Yellow and Red Dot: The red always takes priority if the rim has a white dot or dimple; in such case align red to white. The white dot indicates the low point for radial runout/radial force variation of the rim.
If there is no white dot or dimple forget the red dot and align the yellow dot to the valve stem, then balance the wheel & tire the usual way.