NEW YORK — (AP) — Technology stocks are dragging down the market Friday as Wall Street closes out a holiday-shortened week.
The S&P 500 fell 1.3%, with more than 90% of stocks in the benchmark index losing ground. The benchmark index was managing to hold onto a modest gain for the week.
The Dow Jones Industrial Average fell 418 points, or 1%, to 42,878 as of 1:43 p.m. Eastern time. The Nasdaq composite fell 1.8%.
Technology stocks were the biggest weight on the market Friday. Semiconductor giant Nvidia slumped 2.7%. Its enormous valuation gives it an outsize influence on indexes. Other Big Tech stocks losing ground included Microsoft, with a 2% decline.
A wide range of retailers also fell. Amazon fell 1.9% and Best Buy slipped 1.8%. The sector is being closely watched for clues on how it performed during the holiday shopping season.
Energy stocks held up better than the rest of the market, with a loss of just 0.1% as crude oil prices rose 1.4%.
The S&P 500 gained nearly 3% over a 3-day stretch before breaking for the Christmas holiday. On Thursday, the index posted a small decline.
“There's just some uncertainty over this relief rally we've witnessed since last week,” said Adam Turnquist, chief technical strategist for LPL Financial.
Despite Friday's drop, the market is moving closer to another standout annual finish. The S&P 500 is on track for a gain of around 25% in 2024. That would mark a second consecutive yearly gain of more than 20%, the first time that has happened since 1997-1998.
The gains have been driven partly by upbeat economic data showing that consumers continued spending and the labor market remained strong. Inflation, while still high, has also been steadily easing.
A report on Friday showed that sales and inventory estimates for the wholesales trade industry fell 0.2% in November, following a slight gain in October. That weaker-than-expected report follows an update on the labor market Thursday that showed unemployment benefits held steady last week.
The stream of upbeat economic data and easing inflation helped prompt a reversal in the Federal Reserve's interest rate policy this year. Expectations for interest rate cuts also helped drive market gains. The central bank recently delivered its third cut to interest rates in 2024.
Even though Inflation has come closer to the central bank's target of 2%, it remains stubbornly above that mark and worries about it heating up again have tempered the forecast for more interest rate cuts.
Inflation concerns have added to uncertainties heading into 2025, which include the labor market's path ahead and shifting economic policies under incoming President Donald Trump. Worries have risen that Trump's preference for tariffs and other policies could lead to higher inflation, a bigger U.S. government debt and difficulties for global trade.
Amedisys rose 4.7% after the home health care and hospice services provider agreed to extend the deadline for its sale to UnitedHealth Group. The Justice Department had sued to block the $3.3 billion deal, citing concerns he combination would hinder access to home health and hospice services in the U.S.
The move to extend the deadline comes ahead of an expected shift in regulatory policy under Trump. The incoming administration is expected to have a more permissive approach to dealmaking and is less likely to raise antitrust concerns.
In Asia, Japan’s benchmark index surged as the yen remained weak against the dollar. Stocks in South Korea fell after the main opposition party voted to impeach the country’s acting leader.
Markets in Europe gained ground.
Bond yields held relatively steady. The yield on the 10-year Treasury rose to 4.61% from 4.59% late Thursday. The yield on the two-year Treasury slipped to 4.31% from 4.33% late Thursday.
Wall Street will have more economic updates to look forward to next week, including reports on pending home sales and home prices. There will also be reports on U.S. construction spending and snapshots of manufacturing activity.
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