The major averages rallied on Friday, but finished the week lower as investors drew conflicting conclusions about what the latest payroll numbers mean for future Federal Reserve rate hikes. The Dow Jones Industrial Average gained 401 points, or 1.26%, to close at 32,403. The S&P 500 advanced 50 points or 1.36% to settle at 3,770 while the Nasdaq Composite rose 132 points or 1.28% to finish at 10,475.

All the major averages capped off the week with losses. The Dow shed 1.4%, ending four weeks of gains. The S&P and Nasdaq fell 3.35% and 5.65%, respectively, to break two-week winning streaks.

October's nonfarm payrolls report on Friday left investors divided, fueling some concern that the Fed will persist with its hiking campaign since the labor market added 261,000 jobs. Others interpreted the findings as a sign that labor is beginning to cool — albeit at a slow pace — since the unemployment rate rose to 3.7%.

Investors in recent days have struggled to decipher comments from Fed Chair Jerome Powell regarding whether a tightening pivot may come as the central bank fights to tame rising inflation and a strong economy. Focus also shifted toward next week's consumer price index report. A drop in inflation could signal rate hikes are doing their job and fuel a potential shift.

In other news, hopes of a reopening in China pushed shares of U.S.-listed China stocks higher Friday, although the government hasn't formally announced a pivot. Pinduoduo, JD.com and Alibaba shares surged.

Corporate earnings season also continued, with mobile payment company Block surging 17% after beating expectations. Carvana shared dropped 20% as it posted a wider-than-expected loss, while Twilio and Atlassian both plummeted on disappointing guidance.

Friday's moves follow another downbeat session for Wall Street. The Dow on Thursday lost about 0.5%, while the S&P 500 fell 1%. The Nasdaq, meanwhile, shed 1.7%.

Morgan Stanley's Slimmon on playing the 'massive bifurcation' between mega-cap tech stocks and the rest of the market

A "massive bifurcation" is underway between mega-cap technology stocks and the rest of the market, says Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management.

Many popular technology stocks have sold off sharply in recent days on disappointing earnings results and forecasts. Despite the downdraft in their valuations, Slimmon says to steer clear of many of these names as earnings need to come down. Most are also trading at a premium to the rest of the market.

Instead, Slimmon points investors to stocks he's confident will continue to make their numbers even in a slowing economy. These sectors have also cut estimates and trade at low-teen or high-single-digit multiples.