Stocks declined on Friday led by technology names, but major averages are still on track to post a positive holiday week.

The Dow Jones Industrial Average shed 240 points, falling for the first time in six sessions. The S&P 500 fell 0.8%. The Nasdaq Composite slid 1.8% as Tesla dropped 5%, and Nvidia declined more than 3%.

The three major U.S. indexes are still in the green week to date. The S&P 500 is up 1.1% this week after posting its best Christmas Eve performance since 1974 on Tuesday, according to Bespoke. The Dow has gained 0.7% this week, and a run-up in megacap tech stocks has pushed the Nasdaq Composite 1.4% higher.

Although trading has been muted this week, investors hope stocks will surge into the new year, spurred by the so-called "Santa Claus rally." This refers to the market's tendency to rise in the final five trading days of the year and the first two in January. Since 1950, the S&P 500 has returned 1.3% on average during this period, outpacing the market's average seven-day return of 0.3%, according to LPL Financial. 

"The nation is experiencing a collective sigh of relief after navigating through a contentious election cycle and unusual market dynamics to end 2024 with strong year-to-date gains," said Todd Ahlsten, chief investment officer at Parnassus Investments. "Looking ahead to 2025, the markets are expected to broaden and improve."

In December, the Nasdaq is on pace for a 4.2% advance, lifted by a jump in Tesla and Alphabet shares, as well as by a rally in Apple that's brought the iPhone maker closer to a $4 trillion market cap. The S&P 500 is toting a nearly 0.1% gain on the month. The Dow is on pace for its worst month since April, with a roughly 3.5% decline.

Bank ETF heads for best year since 2013

The Invesco KBW Bank ETF has rallied nearly 35% this year, putting the fund on pace for its best year since 2013.

To hold this milestone, the ETF needs to finish higher than 34.7% on the year. Otherwise, the fund would notch its best year since 2021.

Goldman Sachs is the biggest winner in the index, up more than 50% and on track for its best year since 2009, Bank of New York Mellon, Wells Fargo, First Horizon and JPMorgan have surged at least 40% each.

The S&P 500 banking and regional banking sectors are both headed for their best year since 2021.

— Samantha Subin, Gina Francolla

Stocks making moves before the bell

Check out the stocks making big moves in the premarket:

• Rigetti Computing, Quantum Computing, D-Wave Quantum – Stocks tied to quantum computing were surging in premarket trading, building on a strong year-end rally for the budding industry. Shares of Rigetti rose 27%, while D-Wave Quantum's stock jumped 5% and Quantum Computing shares added almost 8%.
• KULR Technology Group – The stock added more than 11%. On Thursday, shares of the space technology company soared more than 40% after it said it bought 217.18 bitcoin worth about $21 million. The purchase was the company's first since its announcement of a new bitcoin treasury initiative on Dec. 4, when bitcoin topped $100,000 for the first time.
• Amedisys, UnitedHealth – Shares of Amedisys rose more than 4%, while UnitedHealth was marginally lower after a filing revealed that the companies entered into a new waiver agreement, extending the deadline for closing their $3.3 billion merger. The new deadline is 10 days after a final court decision is issued in the lawsuit or on Dec. 31, 2025, whichever is earlier.

Read here for the full list.

— Sean Conlon

Berkshire bought more shares of Verisign

Berkshire Hathaway bought 143,424 more shares of internet name Verisign for roughly $28.5 million through transactions from Friday to Tuesday, according to a regulatory filing.

The Omaha-based conglomerate now owns 13.7% of Verisign, a company that provides domain name registry services and internet infrastructure. Berkshire had purchased some shares earlier in the month.

VeriSign has also had a disappointing year with its stock down more than 1% in 2024, significantly underperforming the tech sector. Berkshire first bought the tech stock in 2013 and hasn't adjusted the stake in years.

— Yun Li

European stocks rise

Stocks in Europe edged higher on Friday, with the pan-European Stoxx 600 index up 0.2% at 8:25 a.m. London time.

Friday is the first full trading session for major European indexes after closures over the Christmas holiday.

Investors were reacting to disappointing economic data out of China, with official figures showing industrial profits in the world's second biggest economy contracted for the fourth consecutive month in November.

Mining stocks were among those in negative territory, while autos and healthcare stocks led gains.

— Chloe Taylor

S&P 500 likely to rally another 16% in 2025, Capital Economics markets economist says

The S&P 500 is likely to end next year near 7000, or nearly 16% above where the index closed Thursday, according to a forecast reiterated by Capital Economics chief markets economist John Higgins between last week's Fed meeting and Christmas.

The London-based researcher is sticking with the projection even though "we think Fed policy will be a bit less accommodative than we had previously projected," and a selloff in bonds drove last week's weakness in stocks.

The sanguine view is based on a belief that "the 10-year TIPS yield – which is typically used as a proxy for this risk-free component because equities are 'real' assets – won't end next year higher than it is now," Higgins wrote. 

"What's more, we still aren't expecting a major deficit-financed fiscal expansion in the U.S. that could bring out the bond vigilantes and drive up Treasury term premia substantially from still-low levels by the standards of the past," Capital Economics said. In addition, forward 12-months earnings per share for the S&P 500 "will continue to grow a bit next year."

— Scott Schnipper

Stock futures open Thursday little changed

Stock futures were marginally lower Thursday evening shortly after 6 p.m. ET.

Futures tied to the Dow Jones Industrial Average shed 22 points, hovering just below flat. S&P 500 futures and Nasdaq 100 futures each dipped less than 0.1%.

The three major U.S. indexes have posted strong gains during this holiday-shortened trading week.

— Pia Singh