On Friday, the S&P 500 and Nasdaq rose as they were lifted by Facebook and energy shares as US Treasury, which took a break due to a recent surge. In a reversal of recent trends, growth stocks outperformed value stocks, which were expected to outshine as the economy recovers from the coronavirus pandemic. The yield on US 10-year bonds, risen sharply in recent weeks due to rising growth expectations, is hovering near a 14-month high of $1.742%.

"What we're seeing today is a more stable rate environment around the curve after several weeks of rising interest rates, and we're seeing some reversal of stock market leadership," Bill Northey, senior investment director at US Bank, said.

After Chief Executive Mark Zuckerberg said Apple Inc's imminent privacy policy updates on ad sales would leave the social network in a "stronger role." Facebook Inc gained 4.1 percent, delivering the biggest boost to the Nasdaq and the S&P 500.

The S&P 500 energy index increased by about 1%, tracking the rise in oil prices, as it recovered from a sell-off earlier in the week. It got triggered by a new wave of coronavirus infections across Europe.

The S&P 500 banks index fell 1.4 percent after the US Federal Reserve said they would not expand a temporary capital buffer relief program to alleviate funding market stress because of the pandemic.

"Banks have had such a big up jump this year and this news has helped to accelerate profit-taking," said Art Hogan, chief market strategist at National Securities in New York.

Over a $1.9 trillion fiscal package, as well as the Fed's pledge to keep its ultra-loose monetary policy in place for years has accelerated a move into economy-related stocks, bringing the S&P 500 and the Dow to new highs this week.

The Nasdaq, on the other hand, is still around 6% below its all-time closing high set on February 12, as technology and high-growth stocks have fallen out of favor in recent months, with their valuations becoming less appealing as Treasury yields rise.

The S&P 500 growth index gained 0.4 percent.

Thanks to "quadruple witching," the quarterly simultaneous expiration of US options and futures contracts on stocks and indices, market trading volumes and liquidity were expected to increase on Friday.

The Dow Jones Industrial Average dropped 0.43 percent to 32,719.53, while S&P 500 rose 0.14 percent to 3,921.1. The Nasdaq Composite increased by 0.74 percent to 13,213.88 points.

FedEx Corp gained 6% after the US distribution business posted higher quarterly profit due to higher rates and increased volume from pandemic-related e-commerce deliveries during the holiday shipping season.

Nike Inc fell nearly 4% after the sports apparel company missed quarterly revenue targets due to distribution problems and pandemic-related downturn problems.

On the NYSE, market leaders outnumbered decliners by a 1.31-to-1 ratio. On Nasdaq, market leaders outnumbered decliners by a 1.64-to-1 ratio. The S&P 500 made 12 new 52-week highs while the Nasdaq Composite made 78 new highs and 21 new lows.