The benchmark S&P/ASX200 index finished Friday down 54.7 points to 6762.8, a drop of 0.8 per cent.
The broader All Ordinaries lost 57.4 points, or 0.82 per cent, to 6976.1.
The ASX200 was up 4.46 per cent for the week, its best performance since a 5.36 per cent gain for the week ending October 9, 2020. However, that doesn't fully reverse the previous three weeks of losses.
The losses came after US Federal Reserve officials overnight emphasised the need for continued rate hikes, with Minneapolis Fed president Neel Kashkari declaring "we're quite a ways away from a pause".
Close to midnight AEDT, the US Labor Department will release non-farm payroll figures for September, including unemployment data.
"I think that the rest of the world, including the ASX, basically will be watching what's going to happen with tonight's figures because that's going to pretty much drive the narrative to the US market, whether they're going to keep being aggressive," CMC Markets Sydney-based analyst Azeem Sheriff said, referring to the Fed's interest rate tightening cycle.
"I think all global equity markets are going to be watching to see what happens.
"Obviously, if the (jobs) number's still strong, then it means the Fed can continue being aggressive because the labour market is still quite tight and there's a bit more wiggle room for unemployment."
If the unemployment rate has picked up, that would suggest the Fed might have to ease its aggressive rate hike tightening cycle, Mr Sheriff said.
"So obviously, that'd be quite positive for the equity market if that happens," he said.
On Friday, however, things were generally negative for the ASX - except in the energy sector, which rose almost one per cent as oil prices climbed again following this week's OPEC+ production cuts.
Woodside gained 0.2 per cent to $34.83 but Santos was up 1.9 per cent to $7.90 and Viva Energy added 2.2 per cent to $2.78.
Coalminers Whitehaven and New Hope were again setting fresh all-time highs, climbing 4.8 per cent to $10.96 and 1.2 per cent to $6.85 respectively.
The mining sector was down 1.2 per cent as BHP dipped 1.7 per cent to $40.06, Rio Tinto declined 1.4 per cent to $96.67 and Fortescue Metals retreated 1.7 per cent to $17.31.
Goldminers Newcrest and Northern Star were both up 1.2 per cent while Evolution dipped 0.5 per cent.
All the big banks were modestly down, CBA by the most, falling 0.5 per cent to $96.42. Westpac fell 0.3 per cent to $21.88 and both ANZ and NAB declined 0.4 per cent to $21.88 and $30.14 respectively.
The ASX's small-cap cannabis stocks were rallying after US President Joe Biden pardoned thousands for marijuana possession and said his administration would review whether the plant should be in the same category as drugs such as heroin and LSD.
Creso Pharma, Elixinol Wellness, Creso Pharma, Incannex Healthcare, Althea Group and ECS Botanics all rose by double digits, with Little Green Pharma close behind with a 9.6 per cent gain.
The Australian dollar meanwhile dropped under 64 US cents, a level it also breached nine days ago but otherwise hasn't touched since May 2020.
The Aussie was buying 63.92 US cents, from 65.27 US cents at Thursday's close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday dropped 54.7 points to 6762.8, a drop of 0.8 per cent.
* The broader All Ordinaries dropped 57.4 points, or 0.82 per cent, to 6976.1.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.92 US cents, from 65.27 US cents at Friday's close
* 92.64 Japanese yen, from 94.23 yen
* 65.37 Euro cents, from 65.77 Euro cents
* 57.43 British pence, from 57.55 pence
* 113.47 NZ cents, from 112.71 NZ cents.
