S&P 500 ends near flat; utilities drop, focus on rate outlook
By Caroline Valetkevitch
NEW YORK (Reuters) — 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 (NASDAQ:NVDA) 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 (NASDAQ:LPLA) 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
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