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Jan 5 (Reuters) - U.S. stock indexes endured a topsy-turvy session on Friday but ultimately closed marginally higher, as investors absorbed the latest macroeconomic data which offered contrasting views on when interest rate cuts may begin.

In terms of weekly performance, both the S&P 500 .SPX and Nasdaq Composite .IXIC ended the first week of 2024 with notable negative performance: The S&P 500 recorded its worst weekly performance since late October, while the Nasdaq posted its worst week since late September.

After a week of negative performance, both the S&P 500 and Nasdaq gyrated through the day. Initially, robust jobs data doused expectations of rapid easing of interest rates, pushing futures lower, before data from the Institute for Supply Management (ISM) services sector data pointing to a weaker economy encouraged those betting on rapid easing, sending markets higher.

However, despite fighting to hold onto gains in the afternoon, markets dipped back into negative territory.

Hopes for a swift pace of easing had triggered a blistering rally in the final weeks of 2023, so any undermining of that hypothesis has been a cue for profit-taking.

"For now, it probably looks like a healthy correction for a market that was overbought at the end of last year," said Greg Boutle, head of US equity & derivative strategy at BNP Paribas.

The ISM survey showed services sector activity, which accounts for more than two-thirds of the economy, fell to 50.6 in December from 52.7 in the previous month. Economists polled by Reuters had forecast 52.6.

Meanwhile, the Labor Department report showed U.S. employers hired more workers than expected in December, while raising wages at a solid clip.

"In terms of the macro data, I think there's something for everybody, in terms of the data that we're seeing," said Boutle.

He added though that this week's data releases were unlikely to have convinced anyone to have changed their minds from their position on rate-cuts coming into the year.

The yield on the benchmark U.S. Treasury 10-year note US10YT=RR, reflecting interest rate expectations, ticked up into the afternoon and was back above 4%. US/

The financials index .SPSY was among the S&P 500 sectors in positive territory, having notching an over 1-1/2-year high earlier in the day.

Banks continued to perform well, ahead of the start of earnings season next week, with the S&P Banks index .SPXBK hitting an 11-month high. Large regional banks were buoyant, with KeyCorp KEY.N, Citizens Financial Group CFG.N and Comerica Inc CMA.N all rising.

According to preliminary data, the S&P 500 .SPX gained 8.37 points, or 0.18%, to end at 4,697.05 points, while the Nasdaq Composite .IXIC gained 11.47 points, or 0.09%, to 14,521.77. The Dow Jones Industrial Average .DJI rose 24.09 points, or 0.07%, to 37,464.43.

Applied Therapeutics APLT.O tumbled after the drug developer's heart disease drug showed disappointing results in a late-stage trial.

Palantir TechnologiesPLTR.N lost after Jefferies downgraded the data analytics firm to "underperform" on high stock valuations.

PelotonPTON.O jumped after the fitness equipment maker said it will bring its workout content to short-form video platform TikTok in an exclusive partnership.

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(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru and David French in New York; Editing by Devika Syamnath and Aurora Ellis)

((johann.mcherian@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.