Stock Market Today: Stocks Slip After Powell Talks Rate Hikes

Stocks' positive momentum faded to start the new week after Federal Reserve Chair Jerome Powell said the central bank is prepared to move "expeditiously" towards tighter monetary policy in order to fight inflation.

"We will take the necessary steps to ensure a return to price stability," Powell said in prepared remarks for a speech today at the National Association for Business Economics.

In addition to taking a more hawkish tone, the Fed chief warned that the war in Ukraine could continue to disrupt global supply chains and raise commodities prices at a time when inflation is already "too high."

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The consumer discretionary sector took the hardest hit today, giving back 0.8%. Energy, on the other hand, jumped 4.0%, as U.S. crude futures surged 7.1% to $112.12 per barrel amid reports the European Union is considering a ban on Russian oil.

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As for the major benchmarks, the Nasdaq Composite ended the day down 0.4% at 13,838, the Dow Jones Industrial Average shed 0.6% to 34,552 and the S&P 500 Index finished 0.04% lower at 4,461 – though a burst of late-day buying power brought all three indexes off their session lows.

Other news in the stock market today:

• The small-cap Russell 2000 fell 1% to 2,065.
• Gold futures eked out a marginal gain to settle at $1,929.50 an ounce.
• Bitcoin backtracked 2.5% to $41,176.50. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.) "The market is going to stay in a trading range until we see crypto regulation clarity in the U.S.," says Charlie Silver, CEO of Permission.io, a cryptocurrency-enabled provider of e-commerce permission advertising. "The bull market will return when trillions of institutional dollars looking for a home have a regulatory green light."
• Boeing (BA (opens in new tab), -3.6%) was the worst Dow Jones stock after a China Eastern Airlines Boeing 737-800 passenger jet crashed earlier today. There were 132 people on board the aircraft, which has a strong safety record. China's Civil Aviation Administration said it will investigate the crash.
• Alleghany (Y (opens in new tab)) surged 24.8% after Warren Buffett's Berkshire Hathaway (BRK.B (opens in new tab), +2.1%) said it would buy the insurer for $11.6 billion in cash, or $848.02 per Y share. Berkshire's acquisition of Alleghany marks the holding company's biggest buyout since 2016.
• In other M&A news, private-equity firm Thoma Bravo said it will buy cloud-based connected planning platform Anaplan (PLAN (opens in new tab), +27.7%) for $10.7 billion in cash, or $66 per PLAN share. The deal is expected to close in the first half of this year, and Anaplan CEO Frank Calderoni will maintain his role.

Another Inflation Hidey-Hole

We've spent much of the past few months touting the ways in which investors can protect their portfolios from inflation and the rising interest rates that come with it.

Among the many corners of the market that can help mitigate the effects of both higher prices and rising rates are reliable dividend payers, such as the Dividend Aristocrats, or defensive plays like consumer staples stocks.

But CFRA Research's thematic research team recently identified a group within the latter sector that looks particularly attractive right now: beverage stocks.

"Similar to other consumer staples companies, soft drink equities tend to be more defensive, value/income-oriented, have relatively stable sales and earnings, strong margins and free cash flow, as well as attractive dividends, which these companies have a history of increasing regardless of economic conditions," the CFRA team says.

Indeed, current market conditions make the investment case for beverage stocks "the strongest it has been in some time," they add.

Investors seeking safety may want to take a look at these top-rated names, which could be a great place to hide amid rapidly rising prices.