• Nvidia market cap briefly overtakes Apple's
• Capri plummets after US judge blocks Tapestry merger
• Nasdaq up 0.56%, Dow down 0.61%, S&P flat

Oct 25 (Reuters) - The Nasdaq ended higher on Friday, driven by megacap shares, as investors awaited quarterly results from some of Wall Street's biggest companies next week.

Tesla (TSLA.O) , opens new tab shares rose 3.36% a day after surging 22% on the electric vehicle maker's sales forecast. Amazon (AMZN.O) , opens new tab, Apple (AAPL.O) , opens new tab and Microsoft (MSFT.O) , opens new tab also rose.

"Tesla numbers helped rekindle some optimism of investors that the Magnificent Seven rally is not over," said Brian Jacobsen, chief economist at Annex Wealth Management.

He was referring to the group of interest rate-sensitive technology stocks which have surged on enthusiasm for artificial intelligence. Chip heavyweight Nvidia (NVDA.O) , opens new tab gained, briefly overtaking Apple (AAPL.O) , opens new tab as the world's most valuable company based on its shares.

The benchmark 10-year Treasury note yield edged higher as investors awaited U.S. employment data next week for clues on the likely path of Federal Reserve interest rate cuts. Earlier this week, the yield reached a three-month high of 4.26%, weighing on the stock market.

The Dow Jones Industrial Average (.DJI) , opens new tab fell 259.96 points, or 0.61%, to 42,114.40, the S&P 500 (.SPX) , opens new tab lost 1.74 points, or 0.03%, to 5,808.12 and the Nasdaq Composite (.IXIC) , opens new tab gained 103.12 points, or 0.56%, to 18,518.61.

The Dow slumped as banking shares fell, with Goldman Sachs (GS.N) , opens new tab down 2.27%, and as fast-food chain McDonald's (MCD.N) , opens new tab lost 2.97% while coping with an E. coli outbreak linked to its hamburgers.

"Banks have rallied as (U.S. presidential candidate Donald) Trump's odds (of winning) increased, so it seems investors are taking some profits," said Michael Rosen, chief investment officer at Angeles Investments.

Regional lender New York Community Bancorp (NYCB.N) , opens new tab dropped 8.26% after reporting its fourth straight quarterly loss, primarily due to its commercial real estate loans.

Continued uncertainty around the U.S. election has made investors cautious.

Equities have been unsettled this week by a rapid rise in yields as bets on rate cuts by the Fed unraveled on expectations of a stronger economic outlook.

Only the Nasdaq closed the week with gains. The tech-heavy index rose 0.16%, while the S&P fell 0.96% and the Dow sank 2.68%.

"The Fed perhaps got a little too dovish ahead of the data. ... The growth and inflation numbers don't necessarily justify easing behavior," said Arnim Holzer, global macro strategist at Easterly EAB Risk Solutions.

Investors are still pricing in another 25-basis-point rate cut at the Fed's November meeting and about two rate cuts by the end of the year, LSEG data showed.

The week starting Oct. 28, the final stretch before the Nov. 5 U.S. presidential election, is crucial for Wall Street. This is when results from megacap tech firms including Alphabet (GOOGL.O) , opens new tab, Apple (AAPL.O) , opens new tab and Microsoft (MSFT.O) , opens new tab are due, along with the October U.S. nonfarm payrolls report.

"Next week looms large with five of the Magnificent Seven stocks reporting and a host of tier one economic releases spanning third quarter," said Paul Eitelman, chief investment strategist for North America at Russell Investments.

Capri Holdings (CPRI.N) , opens new tab slumped 48.89% after a U.S. judge blocked a pending merger between the fashion holding company and handbag maker Tapestry (TPR.N) , opens new tab. Shares of Tapestry rose 13.54%.

Most of the 11 S&P sectors closed down, with utilities leading the pack.

Declining issues outnumbered advancers by a 1.56-to-1 ratio on the NYSE. There were 180 new highs and 43 new lows on the NYSE.

The S&P 500 posted 30 new 52-week highs and two new lows while the Nasdaq Composite recorded 78 new highs and 87 new lows.

Volume on U.S. exchanges was 11.54 billion shares, compared with the 11.28 billion average for the full session over the last 20 trading days.

Sign up here.

https://www.reuters.com/markets/us/futures-gain-treasury-yields-fall-tesla-slips-2024-10-25/