NEW YORK, Oct 2 (Reuters) - The S&P 500 ended nearly flat on Monday with utilities falling sharply, while the Nasdaq edged higher as investors weighed the likelihood the Federal Reserve will need to hold interest rates higher for longer.
Fed Governor Michelle Bowman said she remains willing to support another increase in the central bank's policy interest rate at a future meeting if upcoming data shows progress on inflation is stalling or proceeding too slowly.
The U.S. central bank said last month it may hike rates again as it struggles to bring inflation closer to its 2% annual target.
"We ended September with a market that was enveloped by uncertainty. Coming into this month, it's a market that needs confirmation that earnings are working their way higher ... and that needs to ascertain where the Fed is headed," said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
Investors continue to keep a close eye on rising Treasury yields, she said, but Monday's advance was tied to an agreement to avert a partial U.S. government shutdown, which reduced demand for the debt before this week's key jobs data.
Rate-sensitive utilities was the day's worst-performing S&P sector.
Energy also fell sharply, while technology was up.
According to preliminary data, the S&P 500 gained 0.49 points, or 0.01%, to end at 4,288.54 points, while the Nasdaq Composite gained 88.45 points, or 0.67%, to 13,307.77. The Dow Jones Industrial Average fell 74.08 points, or 0.22%, to 33,433.42.
Shares of Nvidia gained after Goldman Sachs added the chipmaker's stock to its conviction list.
Tesla shares were near flat after the electric vehicle maker missed market estimates for third-quarter deliveries.
Economic data showed U.S. construction spending increased in August. The monthly U.S. jobs report is due on Friday.
S&P 500 companies report third-quarter results later this month, with analysts expecting earnings to have risen slightly from the year-ago quarter.
Among utilities, shares of NextEra Energy tumbled the most to the lowest levels since March of 2020.
Reporting by Caroline Valetkevitch in New York; additional reporting by Shubham Batra and Shashwat Chauhan in Bengaluru Editing by Vinay Dwivedi, Maju Samuel and Richard Chang
