NEW YORK: The S&P 500 ended nearly flat on Monday with utilities falling sharply and investors weighing the likelihood the Federal Reserve will need to hold interest rates higher for longer.

The Nasdaq rose, and shares of Nvidia gained 2.9% after Goldman Sachs added the chipmaker to its conviction list of top stock picks.

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," said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina. All three major indexes posted losses for September and the last quarter.

"Coming into this month, it's a market that needs confirmation that earnings are working their way higher. And, what's crucial for the market is to ascertain where the Fed is headed," she said.

Investors continue to keep a close eye on rising Treasury yields, she said, but Monday's advance in yields 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, falling 4.7% in its biggest one-day percentage decline since April 2020.

Energy also fell sharply along with lower oil prices, while technology was up 1.3%.

The Dow Jones Industrial Average fell 74.15 points, or 0.22%, to 33,433.35, the S&P 500 gained 0.34 points, or 0.01%, at 4,288.39 and the Nasdaq Composite added 88.45 points, or 0.67%, at 13,307.77.

Tesla shares ended up 0.6% even as the electric vehicle maker missed market estimates for third-quarter deliveries.

Economic data showed U.S. factory activity decreased at a shallower-than-expected pace in September, while U.S. construction spending increased in August. Investors anxiously await the monthly U.S. jobs report due on Friday.

S&P 500 companies begin to report third-quarter results later this month, with analysts expecting earnings to have risen 1.6% from the year-ago quarter after falling 2.8% in the second quarter, according LSEG IBES data Friday.

Among S&P utilities, shares of NextEra Energy fell 9% and hit their lowest level in about 3-1/2 years.

Volume on U.S. exchanges was 10.84 billion shares, compared with the 10.49 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancers on the NYSE by a 4.61-to-1 ratio; on Nasdaq, a 2.43-to-1 ratio favored decliners.

The S&P 500 posted two new 52-week highs and 52 new lows; the Nasdaq Composite recorded 24 new highs and 327 new lows. (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)