By Medha Singh and Purvi Agarwal
(Reuters) – Tech and growth stocks dragged Wall Street’s main indexes lower on Friday, at the end of an upbeat holiday-shortened week driven by expectations around a traditionally strong period for markets.
Yields on some U.S. Treasury notes were higher on the day, with the ones on the benchmark 10-year note hovering near an over seven-month high it hit on Thursday. It was last at 4.591%.
Rate-sensitive growth stocks dropped with Nvidia down 2.3% and Tesla off by 2.8%, while Microsoft shed 1.1%.
Among the 11 major S&P sectors, information technology and consumer discretionary fell the most, down about 1.3% each, after powering most of the broader market’s gains in 2024.
“It feels like U.S. equity markets and investors are tepid heading into the end of the year. Nobody wants to be making any major moves before 2025 when the new administration comes in,” said Clayton Allison, portfolio manager at Prime Capital Financial.
At 09:58 a.m. ET, the Dow Jones Industrial Average fell 98.04 points, or 0.23%, to 43,228.17, the S&P 500 lost 42.91 points, or 0.71%, to 5,994.68 and the Nasdaq Composite lost 259.17 points, or 1.29%, to 19,761.26.
The S&P 500 has still recovered most of last week’s losses that stemmed from the U.S. Federal Reserve projecting fewer interest rate cuts in 2025 and hurting risk appetite.
All three indexes are set for weekly gains, with the benchmark index ending Thursday about 1% below its all-time high of 6,099.97 points clinched on Dec. 6.
With three sessions left to close out the year, markets are in the stock-buying season called the “Santa Claus rally” – the last five sessions of December and the first two of January.
Since 1969, the S&P 500 has climbed 1.3% on average in the seven-day trading period, according to the Stock Trader’s Almanac.
“If yesterday is any indication, we are kind of starting off not great on a Santa rally. I feel like we got a lot of it post-election… today is going to give us a pretty good indication but it feels like more market participants are pretty cautious,” said Allison.
U.S. equities have broadly extended their gains from a stellar November, when Donald Trump won the U.S. presidential election, as hopes of pro-business policies under the incoming administration stoked optimism.
Trading volumes in this holiday-shortened week have been below the average of the last six months and are likely to remain subdued until Jan. 6. The next major focus for markets will be the December employments report due on Jan. 10.
