Stocks closed higher Friday as Wall Street recovered following a shaky start to the new year.

The S&P 500 closed up 73.92 points, or 1.26%, at 5,942.47, and the Dow Jones Industrial Average advanced 339.86 points, or 0.8%, to end the day at 42,732.13. The Nasdaq Composite gained about 340.88 points, or 1.7%, to close at 19,621.68.

Tech stocks were a bright spot for the market on Friday. Chip giant Nvidia climbed 4.7%, while server maker Super Micro Computer jumped 10.9%.

Those stocks could benefit from continued spending on artificial intelligence, as will Constellation Energy and Vistra, with shares up 4% and 8.5%, respectively. Microsoft announced Friday that it would spend $80 billion on AI-enabled data centers in the 2025 fiscal year, and power producers have been boosted by the trend.

The rally on Friday was broad, though some of the best performers were also big winners during last year's rally.

"The secular growth drivers that have been driving earnings growth and market gains over the last two years, I think they're still on strong footing and will continue to drive those earnings gains," Jeremiah Buckley, portfolio manager at Janus Henderson Investors, said on CNBC's "Squawk on the Street."

Friday's move came off a choppy trading session on Thursday that saw stocks close lower after a morning rally. The S&P 500 and Nasdaq have fallen for five straight trading sessions, their longest losing streak since April of last year.

The recent weakness for equities means that "Santa Claus" rally, in which stocks gain in the final five trading days of one year and the first two of the next, has failed to materialize. However, many Wall Street strategists and portfolio managers are still optimistic about the market in 2025.

Stocks are on pace to close out the week with losses even with Friday's gains. The 30-stock Dow and the S&P 500 are lower by around 0.6% and 0.5%, respectively. The Nasdaq Composite has dropped 0.6%.

"Generally, these are the days that you kind of have people just moving to the sidelines after what's been a pretty tough last four weeks. And the fact that today you're not seeing that means that perhaps this an orderly type of consolidation, not a beginning of some sort of incredibly painful period," Mark Hackett, chief market strategist at Nationwide Financial, told CNBC.

News out of Washington, D.C., was spurring some individual stock moves on Friday. Shares of U.S. Steel fell 5% after President Joe Biden said he would block the proposed acquisition by Nippon Steel. Booze and beer stocks declined after the U.S. surgeon general issued an advisory on cancer risk related to alcohol consumption, with Molson Coors falling 3%.