The benchmark S&P/ASX200 index on Friday gave back more than half of the previous day's rally - which had left it just 54 points from its all-time high - to finish 66.9 points lower at 7,814.4, a drop of 0.85 per cent.
The broader All Ordinaries on Friday dropped 67.8 points, or 0.83 per cent, to 8,082.3.
For the week, the ASX200 rose 0.8 per cent following its 1.6 per cent gain last week.
AMP deputy chief economist Diana Mousina said markets had climbed following better news on inflation and signs of a "good" moderation in US economic growth, rather than a sharp slowdown
Domestically, softer wage data and an increase in the unemployment rate raised hopes the Reserve Bank might cut interest rates more quickly despite concerns the 2024/25 federal budget, unveiled on Tuesday, would be inflationary, Ms Mousina said.
Interest-rate markets are pricing in expectations the RBA will first cut rates next April, rather than the August 2025 cut implied by the market a week ago, according to the ASX Rate Tracker.
Ten of the ASX's 11 sectors finished lower on Friday, with mining gaining 0.4 per cent.
Technology was the biggest mover, dropping 3.1 per cent as Wisetech Global fell 3.6 per cent and Dicker Data plunged 13.2 per cent to an eight-month low of $9.25 on a trading update.
The technology distributor said the first quarter had been subdued following three years of growth.
It said its revenue had dropped 9.6 per cent to $694.8 million, but it had maintained or grown market share with most of its vendors.
On the flip side, Bendigo and Adelaide Bank was the largest gainer in the ASX200, climbing 8.2 per cent to a 21-month high of $10.73 on a trading update that was better received.
The country's sixth-largest bank said it had made $464 million in cash earnings in the 10 months to April 30, down 2.3 per cent from a year ago but nine per cent better than analyst expectations.
Chief executive Marnie Baker said prudent management of costs had helped Bendigo grow its net interest margin, a closely watched metric of profitability.
Fellow regional lender Bank of Queensland rose 1.9 per cent to $5.98, while the Big Four banks were mostly lower.
CBA dropped 1.0 per cent to $121.04, ANZ fell 0.5 per cent to $28.13 and NAB edged 0.1 per cent lower at $34.53, while Westpac rose 0.2 per cent to $26.77.
In the heavyweight mining sector, gains for the iron ore giants and lithium companies outweighed losses for the goldminers.
BHP rose 0.8 per cent to $44.89, Rio Tinto climbed 1.4 per cent to $132.15 and Fortescue added 1.2 per cent to $26.94, while goldminers Evolution, Northern Star and Newmont dropped by 1.8, 1.7 and 1.3 per cent respectively.
Lithium miner Pilbara rose 2.2 per cent, Liontown grew 4.9 per cent and smaller peers Vulcan Energy, Patriot Battery Metals and Latin Resources all posted double-digit gains.
Elsewhere, NextEd Group grew 12.2 per cent to 27.5c as the tertiary education provider said its international student enrolment was up 11 per cent to 3,528 in the March quarter, despite the government crackdown on foreign student visas.
The Australian dollar was buying 66.74 US cents, from 66.78 US cents at Thursday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 closed on Friday down 66.9 points, or 0.85 per cent, to 7,814.4.
* The broader All Ordinaries dropped 67.8 points, or 0.83 per cent, to 8,082.3.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.74 US cents, from 66.78 US cents at Thursday's ASX close
* 103.95 Japanese yen, from 103.00 Japanese yen
* 61.43 Euro cents, from 61.37 Euro cents
* 52.69 British pence, from 52.68 pence
* 109.01 NZ cents, from 109.19 NZ cents.
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