Wall Street's Santa Claus Rally Faces Correction Amid Volatile Tech Stocks

Tech and growth stocks have dragged Wall Street's main indexes lower at the end of a strong week driven by market expectations. Rate-sensitive growth stocks, including Nvidia and Tesla, fell. Despite declines, major indexes indicate weekly gains as they enter the 'Santa Claus rally' period.

In a downturn that overshadowed a robust week, tech and growth stocks caused Wall Street's main indexes to fall on Friday. This came despite market optimism usually associated with a traditionally strong trading period.

The yield on U.S. Treasury notes, including the 10-year benchmark note, increased, posing challenges for rate-sensitive stocks like Nvidia, Tesla, and Microsoft, which faced significant declines. As Jay Woods of Freedom Capital Markets noted, this marks the start of a 'healthy correction' in tech sectors, spanning over the next few weeks.

Nevertheless, Wall Street looks to close the week with gains amid the 'Santa Claus rally,' serving as a buffer against the previous week's Federal Reserve-related losses. The focus now shifts to upcoming market indicators, such as the December jobs report.

(With inputs from agencies.)