Stocks curb gains as Powell talks inflation, March rate hike

U.S. stocks closed lower after the Federal Reserve signaled a rate hike is on the table for March and as Chairman Powell discussed the challenges of a post-pandemic economic recovery. 

The Dow Jones Industrial Average fell over 129 points or 0.4%, while the S&P 500 fell 0.15% and the Nasdaq Composite pushed out a fractional gain of 0.02%. All three of the major averages gave up gains of between 2-3% midday. 

BIDEN TASKS FED WITH INFLATION FIGHT

Ticker	Security	Last	Change	Change %
I:DJI	DOW JONES AVERAGES	44782	-128.65	-0.29%
SP500	S&P 500	6047.15	+14.77	+0.24%
I:COMP	NASDAQ COMPOSITE INDEX	19403.947849	+185.78	+0.97%

In earnings, Microsoft shares closed 2% higher after the software maker's strong quarter and better-than-expected revenue, which hit $51.7 billion, a 20% jump.

MICROSOFT PROFITS UP 21%, GIVING CUSHION FOR GAMING PUSH

Ticker	Security	Last	Change	Change %
MSFT	MICROSOFT CORP.	430.98	+7.52	+1.78%

Tesla reports after the closing bell with Apple on tap for Thursday. 

Ticker	Security	Last	Change	Change %
TSLA	TESLA INC.	357.09	+11.93	+3.46%
AAPL	APPLE INC.	239.59	+2.26	+0.95%

Boeing shares fell after recording a $4.16 billion loss for the fourth quarter tied to production flaws of its 787 jetliner and compensation for airlines that are still waiting to get their planes. The company also said problems with the 787 will add $2 billion in unusual production costs, double the earlier projection.

The aircraft maker took a charge of $3.5 billion to cover additional delays in delivering copies of its 787 jetliner and compensation for airlines awaiting planes.

Ticker	Security	Last	Change	Change %
BA	THE BOEING CO.	156.54	+1.10	+0.71%

Chip stocks gained momentum after Texas Instruments forecast revenue in the first quarter would be as high as $4.9 billion, exceeding analyst estimates. 

Ticker	Security	Last	Change	Change %
TXN	TEXAS INSTRUMENTS INCORPORATED	201.03	+1.84	+0.92%
NVDA	NVIDIA CORP.	138.25	+2.91	+2.15%

Mattel confirmed it has won back the rights to license Disney's toys around the Princess line and "Frozen" franchise from Hasbro. "The new licensing arrangement builds on the existing licensing relationship between Mattel and Disney for Pixar Animation Studio’s 'Toy Story' and ‘Cars’ franchises, and the recently announced global licensing agreement for ‘Lightyear,’" the company noted. 

Ticker	Security	Last	Change	Change %
DIS	THE WALT DISNEY CO.	115.67	+0.94	+0.82%
MAT	MATTEL INC.	18.69	+0.31	+1.69%
HAS	HASBRO INC.	62.52	+0.61	+0.99%

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Ticker	Security	Last	Change	Change %
USO	UNITED STATES OIL FUND - USD ACC	71.75	+0.12	+0.17%

Oil also rose to $87.35 per barrel level. Ukraine's leaders have assured their country that an invasion from neighboring Russia is not imminent but acknowledged the threat is real and received a shipment of U.S. military equipment to shore up their defenses. Moscow has denied it is planning an assault, but it has massed an estimated 100,000 troops near Ukraine in recent weeks and is holding military drills at multiple locations in Russia. That has led the United States and its NATO allies to rush to prepare for a possible war.

In crypto currencies, Bitcoin continued to stabilize trading at the $37K level. 

In other economic news, sales of new single-family homes jumped to 811,000 in December well above the 760,000 expected. 

FOX Business' Ken Martin and The Associated Press contributed to this report.