US stocks experienced a slight dip on Monday following Federal Reserve Chair Jerome Powell's remarks that signaled a decreased likelihood of an early interest rate cut. Concerns over the rate cut prospects have raised the stakes for a busy week of corporate earnings, testing the resilience of the recent rally.

The S&P 500 ended the session down 0.3%, indicating a pullback from the benchmark's record-setting run. Similarly, the Dow Jones Industrial Average shed about 0.7%, while the tech-heavy Nasdaq Composite fell 0.2%. The dip in stocks followed a rollercoaster week with positive momentum from a blowout January jobs report and strong high-profile earnings updates.

Powell's interview on "60 Minutes" on Sunday reiterated his cautious approach towards rate cuts, emphasizing that the central bank will tread carefully in deciding when to make any adjustments. He warned that moving too soon could risk not fully addressing inflation concerns. Traders responded by scaling back their bets on rate cuts, not just for March but also for May, according to the CME FedWatch Tool.

The dip in stocks was further influenced by the underperformance of some major companies. McDonald's shares fell more than 3% after its sales came in below Wall Street estimates. However, not all sectors faltered, as Healthcare and Technology stocks managed to eke out gains. Nvidia closed at a new record high on Monday, while Apple gained more than 1%.

The impact of Powell's remarks was also felt in the bond market, with the 10-year Treasury yield rising to 1.77%. The rise in bond yields suggests that investors are absorbing the message from the Federal Reserve.

Furthermore, the ISM services sector reading for January showed a pickup in growth, signaling a further diminishing chance of a rate cut in March. This positive economic indicator exacerbated the diminishing prospects for an immediate rate cut.

Looking ahead, key focus will be on Ford's fourth-quarter results, scheduled to be reported after the bell on Tuesday. As the company shifts its focus to hybrid production, market watchers will be closely monitoring the results, especially after General Motors' strong results and positive profit guidance, indicating strength in the overall US auto sector.

Overall, US stocks slipped as hopes for an early rate cut faded following Powell's cautious remarks. The market reaction signified a pause in the record-setting run of the S&P 500, while traders adjust their rate cut expectations. As corporate earnings announcements continue throughout the week, market participants will closely monitor the impact on market sentiment and the sustainability of the recent rally.