Tech rebound drags Wall Street stocks.

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U.S. technology stocks fell on Friday as investors shunned companies that have driven markets higher for much of this year.

The S&P 500, Wall Street’s main equity gauge, was down 1.2 percent in Friday afternoon trading, while the tech-heavy Nasdaq Composite was down 1.7 percent. Elon Musk’s electric car maker Tesla While the chip maker fell 4.8 percent, it was among the biggest laggard Nivea It’s down more than 2 percent.

Tech stocks have rallied strongly this year, as investors bet Artificial intelligence It powers everything from servers to microchips. After Donald Trump won the election in November, gains accelerated on bets that the president-elect would enact more business-friendly policies when he takes office next month.

However, the sector has become more buoyant in recent weeks as investors reassess their best-performing holdings at the end of the year. The Federal Reserve also forecast just two quarter-point rate cuts next year, sparking controversy last week when officials compared their September forecast with concerns that inflation could reach above the central bank’s target of 2 percent.

Hawkish forecasts raised US long-term borrowing costs, with the 10-year Treasury yield rising to 4.61 percent on Friday, from a low of 3.6 percent in September. High yields often undermine the desire to own stocks in fast-growing companies.

Analysts at Citigroup said on Friday that they expect the S&P 500 to still rise about 10 percent from current levels by the end of next year, but expect a “more volatile leg of the bull market.”

Bank of America said this year’s stock price relative to corporate profits is “significantly positioning for fundamentals in the year ahead and beyond.” The S&P 500 trades at about 22.2 times next year’s expected earnings, compared with the past average of 18.1, according to FactSet data.

Even after Friday’s pullback, the S&P 500 is up about 25 percent for the year.

The Magnificent 7 Big Tech stocks — Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia and Tesla — have accounted for nearly half of the S&P 500’s total returns this year, including dividends, according to Howard Silblatt of S&P Dow Jones Indices.

All Magnificent 7 stocks fell on Friday, but Apple, Microsoft, Amazon and Meta each fell at least 1 percent.

Trading activity is typically lighter than usual during the holidays, which can exacerbate volatility.