NEW YORK, March 15 — Major US stock indexes closed mostly lower on Monday, led by a more than 2 per cent drop in Nasdaq, as investors sold tech and big growth names ahead of this week’s Federal Reserve meeting and an expected hike in interest rates.

The Dow ended flat, with financial and healthcare shares giving the index some support.

Developments in the Ukraine-Russia conflict added to investor caution as Russian and Ukrainian delegations held a fourth round of talks on Monday, but no progress was announced, while Russian forces allowed a first convoy of cars to escape Ukraine’s besieged port of Mariupol.

Apple Inc AAPL.O shares fell 2.7 per cent and weighed the most on the S&P 500 and Nasdaq after its supplier Hon Hai Precision Industry Co Ltd, known as Foxconn, suspended operations in China’s Shenzhen amid rising Covid-19 cases.

The Fed is expected to raise interest rates for the first time in three years Wednesday in an effort to combat rising inflation.

"We’re seeing that rotation into value and away from growth, and a lot of that is tied to what’s happening to interest rates,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

"Equity markets are going to be challenged going forward, and today is yet another example of that.”

The technology sector .SPLRCT and consumer discretionary .SPLRCD were the biggest drags on the S&P 500. Higher interest rates are a negative for tech and growth stocks because their valuations rely more heavily on future cash flows.

The Dow Jones Industrial Average .DJI rose 1.05 points to 32,945.24, the S&P 500 .SPX lost 31.2 points, or 0.74 per cent, to 4,173.11 and the Nasdaq Composite .IXIC dropped 262.59 points, or 2.04 per cent, to 12,581.22.

The Russell 2000 index of small capitalization stocks .RUT fell 1.9 per cent and was down more than 20 per cent from its November record closing high. The Cboe volatility index .VIX, also known as Wall Street’s fear gauge, rose.

The S&P financial index .SPSY rose 1.3 per cent as US Treasury yields jumped to 2-1/2-year highs. The healthcare sector .SPXHC advanced 0.7 per cent, with UnitedHealth Group UNH.N up 1 per cent.

Energy .SPNY slid 2.9 per cent, as Brent crude fell below $110 a barrel, a week after it rose as high as $139 due to the Ukraine crisis.

Oil and other commodity prices have shot up following tough Western sanctions against Russia.

Declining issues outnumbered advancing ones on the NYSE by a 3.05-to-1 ratio; on Nasdaq, a 2.97-to-1 ratio favored decliners.

The S&P 500 posted 11 new 52-week highs and 32 new lows; the Nasdaq Composite recorded 26 new highs and 615 new lows.

Volume on US exchanges was 14.26 billion shares, compared with the 13.7 billion average for the full session over the last 20 trading days. — Reuters