U.S. stocks closed higher Friday after a rocky start to the week, as a rebound in technology shares offset tumbling consumer stocks such as Nike.

Megacaps extended gains from Thursday, when chipmaker Micron Technology's strong forecasts re-ignited optimism around AI-related shares, which had recently come under pressure over lofty valuations and funding concerns.

Micron shares reached a record high on ‍Friday. Nvidia also rose as the U.S. launched a review that could allow the first shipments to China ‍of Nvidia's second-most powerful AI chip.

Meanwhile, Oracle jumped after TikTok's Chinese owner, ByteDance, signed binding agreements to hand control of the short-form video app's U.S. operations to a group of investors, including the ⁠cloud computing giant.

"Tech in general, particularly the AI-related companies, came under a fair amount of pressure and when Micron reported [on Wednesday] and the market reacted the way that it did, there’s the idea that maybe people can come ​back to these ," said Thomas Martin, senior portfolio manager at Globalt Investments.

December has also traditionally been a strong period for stock markets. Since 1950, the so-called Santa Claus rally has been reflected by the S&P 500 rising by an average of 1.3% over the last five trading days ‍of the year and the first two trading days in January, according to the Stock Trader's Almanac.

According to preliminary data, ⁠the S&P 500 gained 61.15 points, or 0.90%, to end at 6,835.91 points, while the Nasdaq Composite gained 299.52 points, or 1.30%, to 23,305.88. The Dow Jones Industrial Average rose 180.38 points, or 0.38%, to 48,132.23.

In consumer names, Nike shares slumped after the sportswear giant reported a drop in gross margins for the second consecutive quarter, hurt by poor sales in China and efforts to reset its product ⁠mix.

Lamb Weston plunged after the supplier of frozen French fries ​signaled muted demand for its products ⁠for the rest of the fiscal year.

Conagra fell after the Slim Jim meat snacks maker reported weak earnings. Investors drew comfort from U.S. consumer prices rising less than ‍expected in November, but some analysts flagged that the print could be distorted due to the 43-day government shutdown that prevented the collection of October data.

Traders continued ‌to bet on at least two 25-basis-point interest rate cuts next year from the Federal Reserve, according to LSEG data, while assigning a 20% chance to the first reduction as early as January.

Analysts warned of higher volatility on Friday due to "triple witching," ⁠which is the ​quarterly, simultaneous expiration of stock options, stock ‍index futures and stock index options contracts.

"The oversold bounce is helping and the options expiration is helping to kind of clear out some of those positions," said Brent Kochuba, founder of analytics service SpotGamma. However, he ‍noted that the options expiration could leave the market more vulnerable to price swings after the Christmas holiday.