The Nasdaq also ended the week lower, although it and the S&P 500 remained near 14-month highs after economic data this week pointed to cooling inflation, eclipsing concerns about further rate hikes.

After holding rates steady on Wednesday, the U.S. central bank signaled borrowing costs could rise as much as half a percentage point by year-end. However, traders see the Fed pausing hikes or even cutting rates in December following an expected 25-basis-point rate hike in July, according CMEGroup's Fedwatch tool.

Fed policymakers on Friday attempted to cool that optimism. Fed Governor Christopher Waller warned "core inflation is not coming down like I thought it would." Richmond Fed President Thomas Barkin said he was "comfortable" with further rate increases given that inflation was still not on the path back to 2%.

"I think the Fed will continue to jawbone the market's enthusiasm down and say 'No, we plan on raising two more times, but of course we are data dependent,'" said CFRA Research Chief Investment Strategist Sam Stovall.

U.S. consumers' near-term inflation expectations dropped to a more than two-year low in June and the outlook over the next five years improved slightly, according to the University of Michigan's survey that also showed sentiment perking up.

A decline in Microsoft Corp. weighed on the S&P 500 and the Nasdaq. The technology company's stock on Thursday closed at its highest level ever.

U.S. stock markets will be closed Monday for the Juneteenth holiday.

Fueled by recent strong gains in Nvidia and other megacaps, the Nasdaq logged its eighth consecutive week of gains, its longest streak of weekly advance since March 2019.

The benchmark S&P 500's weekly gain was its fifth in a row.

Unofficially, the S&P 500 declined 0.36% to end the session at 4,409.84 points.

The Nasdaq declined 0.68% to 13,689.57 points, while Dow Jones Industrial Average declined 0.31% to 34,301.36 points.

Adobe Inc rose after the Photoshop maker's earnings forecast surpassed analysts' estimates.

iRobot Corp surged after Britain's competition regulator cleared Amazon.com Inc's planned $1.7 billion acquisition of the vacuum cleaner maker.

Micron Technology fell after warning of a bigger hit to global revenue from a Chinese ban on the sale of its memory chips to key domestic industries.