US stocks experienced a slight pullback on Monday after Federal Reserve Chair Jerome Powell's remarks dashed hopes of an early interest rate cut. The overall sentiment was tempered as investors looked ahead to a busy week of corporate earnings reports. The S&P 500 ended the session down 0.3%, signaling a retreat from its recent record-setting run, while the Dow Jones Industrial Average shed about 0.7%. The tech-heavy Nasdaq Composite also fell by 0.2%.

Powell's comments during a "60 Minutes" interview on Sunday reaffirmed his stance that the central bank will proceed cautiously in determining when to cut rates. He emphasized that the job of quelling inflation is not yet accomplished, citing the risk of moving too soon. Traders responded by scaling back their bets on rate cuts, not only for March but also for May, as indicated by the CME FedWatch Tool.

The news had a ripple effect in the bond market, with the yield on the 10-year Treasury rising to 1.77%. This increase in bond yields contributed to the decline in stocks.

In the corporate sphere, McDonald's shares fell more than 3% as the company's sales fell short of Wall Street estimates. On the other hand, Nvidia closed at a new record high, boosting the technology sector. Apple also saw modest gains of over 1%.

The likelihood of a rate cut in March was further diminished by the release of the ISM services sector reading for January, which showed a pickup in growth. This development, coupled with Powell's remarks, dimmed the chances of a rate cut and dampened investor enthusiasm.

Meanwhile, in the oil market, futures reversed earlier losses and turned positive. The earlier decline was prompted by Powell's indication that a rate cut in March was unlikely. Lower interest rates typically stimulate economic activity, which translates to higher oil demand. However, concerns over geopolitical tensions in the Middle East have also influenced oil prices.

Looking ahead, investors will be closely monitoring Ford's fourth-quarter results, which will be announced after the bell on Tuesday. The report will shed light on the company's shift towards hybrid production and comes on the heels of General Motors' strong results, which indicated overall strength in the US auto sector.

Overall, while the stock market experienced a slight retreat due to Powell's remarks, market bulls remain optimistic. The focus has shifted from the timing of rate cuts to the strength of the US economy and the potential for continued business activity and economic growth.