The benchmark S&P/ASX200 index on Friday finished 25.4 points, or 0.33 per cent, lower at 7,724.3, giving back the bulk of Thursday's gains.
For the week, the ASX200 lost 135.7 points, or 1.73 per cent, after last week gaining 158 points, or 2.06 per cent.
The broader All Ordinaries on Friday finished down 27.7 points, or 0.35 per cent, at 7,974.8.
The day's losses came despite a positive lead from Wall Street, where the S&P500 and Nasdaq gained for a fourth day in a row.
Dimming hopes for domestic rate cuts this year may be behind the malaise, particularly after Thursday's better-than-expected labour force report.
The report showed 38,700 new jobs being created in May, nearly 9,000 more than economists had collectively predicted.
ANZ's economics team this week pushed back its forecast for when the Reserve Bank would begin cutting interest rates, predicting they would not begin until February 2025, rather than this November.
The other big retail banks still expect a rate cut this November.
The RBA meets on Tuesday, with more than 30 economists and other experts polled by Finder.com.au all predicting the central bank would leave rates unchanged.
AMP deputy chief economist Diana Mousina said economic data since the RBA's last meeting had been mostly in line with the central bank's expectations, with a bit more federal and state government spending than it would probably like, balanced by a slightly smaller-than-expected hike in minimum wage awards.
"All up, there is no reason for the RBA to change its assessment that the current stance of monetary policy is appropriate but that they can't rule anything 'in or out' in terms of interest rates," Ms Mousina wrote.
Eight of the ASX's 11 sectors finished lower on Friday, with property flat and consumer discretionary and health care slightly higher.
The telecommunications sector was the biggest loser, falling 1.1 per cent as carsales.com owner CAR Group dropped 3.0 per cent and Seek dipped 1.3 per cent.
In the heavyweight mining sector, goldminers saw red as the yellow metal changed hands at $US,2306 an ounce, down from $2,340 earlier in the week.
Evolution slipped 2.2 per cent, Northern Star slid 2.0 per cent and mid-tier miner Resolute dropped 7.3 per cent.
Elsewhere in the sector, Rio Tinto fell 0.4 per cent to $120.20, Fortescue dropped 0.9 per cent to $23.20 and BHP dipped 0.3 per cent to $43.09.
The big four banks were mostly slightly lower, with Westpac dipping 0.3 per cent to $26.79 and ANZ and CBA both edging 0.1 per cent lower, at $27.75 and $125.31. NAB was the outlier, basically flat at $35.02.
Telix Pharmaceuticals rose 0.9 per cent to a two-week low of $16.61 after the Melbourne-based radiopharmaceutical company cancelled a proposed US initial public offering it had spent five months and "incredibly long hours" preparing for.
The Nasdaq listing was not needed to raise capital and, in the end, would have required discounts that were not aligned to Telix's duty to existing shareholders, the company said.
Tabcorp gained 10.1 per cent to a three-week high of 65.5c after the NSW government said it would review Tabcorp's proposal to increase taxes on corporate bookmakers like Sportsbet and Ladbrokes, whom Tabcorp say benefit from an uneven playing field.
The Australian dollar was buying 66.13 US cents, from 66.45 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday dropped 25.4 points, or 0.33 per cent, to 7,724.3.
* The broader All Ordinaries fell 27.7 points, or 0.35 per cent, to 7,974.8.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.13 US cents, from 66.45 US cents at Thursday's ASX close
* 104.51 Japanese yen, from 104.37 Japanese yen
* 61.71 euro cents, from 61.47 euro cents
* 51.94 British pence, from 51.97 pence
* 107.77 NZ cents, from 107.70 NZ cents
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