The S&P/ASX200 lost 51.7 points, or 0.57 per cent, to 8,967.4 on Friday, while the broader All Ordinaries shed 49.9 points, or 0.54 per cent, to 9,234.3.
While the local bourse hung on to some of the week's historic gains, all eyes are on the US Federal Reserve's Jackson Hole Symposium this weekend for hints of the central bank's appetite for interest rate cuts.
"It was fairly modest pullback today in the context of things," Capital.com senior market analyst Kyle Rodda told AAP.
"But, quite simply, the next cue is going to come from this speech, and we'll only know that about midnight tonight and then see how we open on Monday."
Seven of 11 local sectors finished the day lower, led by slumps in consumer staples, health care and real estate stocks.
Financials and consumer discretionary stocks outperformed over the week, each up more than four per cent following some impressive financial scorecards and green shoots of rebounding consumer confidence.
The big four banks were mixed, with Westpac up 0.7 per cent to $38.98 and CBA falling 0.6 per cent to $172.84, while NAB and ANZ traded either side of flat.
Both Westpac and NAB are trading at record highs while ANZ is roughly 9.0 per cent short of its peak set in 2015.
Buy-now, pay-later provider Zip Co was Friday's star performer, up more than 20 per cent to $3.75 after smashing earnings expectations and flagging a potential dual listing on the Nasdaq.
At the other end of the table was fast food chain Guzman y Gomez, which tanked more than 18 per cent after posting an operating loss in its US division and weak Australian sales growth.
The materials sector finished the week 2.3 per cent lower, snapping a two-week streak.
The slide followed a grim quarterly earnings update wiped roughly a third from the value of fibre cement manufacturer James Hardie on Wednesday.
The healthcare sector was the week's worst-performing segment, falling 11 per cent after CSL announced plans to slash one in six jobs and close 22 US plasma centres, prompting a sell-off that wiped a fifth of its market value.
Real estate stocks slumped 1.8 per cent on Friday, but edged higher over the week, thanks to a stellar performance on Wednesday on the back of Stockland and HMC Capital's earnings updates.
The Australian dollar lost ground against the greenback, buying 64.19 US cents and trading at three-week lows as shrinking hopes of US interest rate cuts bolstered the US dollar.
ON THE ASX:
* The S&P/ASX200 fell 51.7 points on Friday, or 0.57 per cent, to 8,967.4
* The broader All Ordinaries lost 49.9 points, or 0.54 per cent, to 9,234.3
CURRENCY SNAPSHOT:
One Australian dollar buys:
* Â 64.19 US cents, from 64.17 US cents on Thursday
* 95.33 Japanese yen, from 94.73 Japanese yen
* 55.38 euro cents, from 55.19 euro cents
* 47.89 British pence, from 47.75 British pence
* 110.58 NZ cents, from 110.34 NZ cents
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