The S&P 500 and the Nasdaq gained in choppy trading on Friday, reversing course after a brief sell-off in technology stocks, while hawkish comments from Federal Reserve policymakers deepened doubts of an interest rate cut in December.

Wall Street's main indexes had lost more than 1% each earlier in the session over worries about stretched AI stock valuations, which have weighed on markets this week. However, investors saw it as an opportunity to buy expensive stocks at relatively cheaper prices.

"This week is a tug-of-war between increased concern over the durability of the AI story against the buy the dip instinct," said Mark Hackett, chief market strategist at Nationwide.

At 1 p.m. EST, the Dow Jones Industrial Average fell 1181.09 points, or 0.38%, to 47,276.13, the S&P 500 gained 17.67 points, or 0.26%, to 6,755.16, and the Nasdaq Composite gained 105.16 points, or 0.45%, to 22.969.26.

The CBOE Volatility Index, Wall Street's fear gauge, touched a one-week high earlier and was last down 0.13 points at 19.83.

S&P 500 tech stocks rose 1.3%, with AI bellwether Nvidia up 1.7% after dropping more than 3% in early trading.

Nvidia's results next week could further make or break the stock's rally, which has been the main driver behind indexes hitting all-time record highs this year.

Phil Blancato, chief executive officer at Ladenburg Thalmann Asset Management, said Nvidia's results, expected to be "strong," were adding to reasons for "buying the dip."

Other chip stocks were also higher, with Advanced Micro Devices and Broadcom up about 1.2% each. The broader semiconductor index gained 1.1%.

Financial stocks such as Goldman Sachs and American Express bogged down the Dow.

Meanwhile, a growing number of Fed policymakers signaled reticence on further rate cuts in December.

Kansas City Fed President Jeffrey Schmid, who was one of two dissenters on the central bank's October decision to cut interest rates, said the current monetary policy stance was "only moderately restrictive, which is about where I think it should be."

Expectations for a 25-basis-point rate cut in December fell to 45.6% from last week's 67%, according to CME Group's FedWatch tool.

The three major U.S. stock indexes posted their steepest one-day declines in over a month in the previous session. However, all three were on track to end with weekly gains.

Some concerns also lingered around the health of the labor market and the inflation outlook, as markets expect some permanent data gaps despite a resolution on Thursday to the historic U.S. government shutdown.

On the trade front, the Swiss government said U.S. tariffs on Swiss goods will be reduced to 15% from 39%.

Among other stocks, Walmart fell 1.2% after announcing CEO Doug McMillon would retire next year.

Warner Bros Discovery gained 3.7%. The entertainment company said it had amended CEO David Zaslav's employment agreement amid a strategic review of its business.

Cidara Therapeutics more than doubled after Merck said it will acquire the company in a nearly $9.2 billion deal.

Declining issues outnumbered advancers by a 1.13-to-1 ratio on the NYSE and by a 1.03-to-1 ratio on the Nasdaq.

The S&P 500 posted 9 new 52-week highs and 8 new lows while the Nasdaq Composite recorded 39 new highs and 255 new lows.