The benchmark S&P/ASX200 index was down 40.4 points to 6777.1 at noon AEDT on Friday, a drop of 0.59 per cent.
The broader All Ordinaries fell 44.4 points, or 0.63 per cent, to 6989.2.
The ASX200 was up 4.62 per cent for the week, putting it on track for its best performance since a 5.36 per cent gain for the week ending October 9, 2020. However, that doesn't fully reverse the proceeding three weeks of losses.
On Friday morning, however, every sector except energy was in the red. Property was the biggest loser, falling 1.8 per cent.
The losses came after US Federal Reserve officials overnight emphasised the need for continued rate hikes, with Minneapolis Fed president Neel Kashkari declaring that "we're quite a ways away from a pause".
The September US non-farm payrolls report, due on Friday night AEDT, will be closely watched as it influences Fed policy.
The ASX's heavyweight mining sector was down 0.9 per cent at noon, with BHP dropping 1.1 per cent to $40.30, Fortescue Metals down 1.0 per cent to $17.42 and Rio Tinto declining 0.9 per cent to $97.21.
Goldminers were mixed, with Evolution down 1.1 per cent while Newcrest and Northern Star were up by 1.1 per cent.
The big retail banks were modestly lower, by between 0.3 and 0.4 per cent.
In the energy sector, Woodside was up just 0.1 per cent to $34.79 while smaller players were racking up bigger gains.
Santos climbed 1.9 per cent to $7.895, Beach was up 1.3 per cent to $1.615 and Whitehaven Coal was up 4.4 per cent to a record high of $10.920.
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 and ECS Botanics were up by double digits, while Cann Group was and Little Green Pharma were up by about 8.0 per cent.
