Strong gains by the mining giants were not quite enough to keep the local bourse in the green, with every other sector losing ground.
The benchmark S&P/ASX200 index on Friday finished down 9.1 points, or 0.11 per cent, to 8,580.1, while the broader All Ordinaries dipped 6.4 points, or 0.07 per cent, to 8,820.3.
The ASX200 finished the week down 0.27 per cent, snapping its two-week winning streak.
AMP deputy chief economist Diana Mousina noted the week had been marked by the Reserve Bank's surprise decision on Tuesday to keep interest rates unchanged, rather than cut them, as most economists expected.
"Share market volatility is likely to remain high in the next few months given tariff uncertainties, concerns about US debt and likely weaker growth and profits," Ms Mousina wrote.
"But with Trump pivoting towards more market-friendly policies and central banks, including the Fed and RBA, likely to cut rates further, shares are likely to provide reasonable gains into year end."
The mining sector rose 1.8 per cent as iron ore prices hit multi-month highs on hopes of further supply-side reform measures in China's steel sector.
BHP gained 2.8 per cent to $39.36, Rio Tinto added 2.8 per cent to $111.10 and Fortescue climbed 2.9 per cent to $16.98.
Rare earth miners Lynas and Iluka Resources surged after the Pentagon announced it was taking a multibillion-dollar stake in New York Stock Exchange-listed rare earth miner MP Materials.
It is part of a move by the US to try to reduce reliance on China for rare earth magnets, a critical component of weapons systems, electric vehicles and electronics.
Lynas rocketed 16.7 per cent to a three-year high of $9.67, while Iluka soared 22.9 per cent to a six-month high of $4.89.
Also, critical mineral company Iperionx gained 15.6 per cent to a six-month high of $4.98
Elsewhere in the materials sector, Johns Lyng Group soared 22.6 per cent to a seven-month high of $3.90 after the building services company agreed to be acquired by Sydney-based private equity firm Pacific Equity Partners for $4 a share, or $1.1 billion.
Goldminers were lower even as the yellow metal traded for $US3,342 an ounce, up $US16 from Thursday.
Northern Star dipped 2.2 per cent and Evolution lost 1.5 per cent, while Ora Banda Mining dropped 9.0 per cent to a seven-month low after the WA goldminer announced production results for 2024/25 that investors found disappointing.
In the financial sector, three of the four big banks finished lower.
CBA dropped 0.5 per cent to $179.42, NAB dipped 0.3 per cent to $39.61 and Westpac edged 0.2 per cent lower at $33.81.
ANZ was the outlier, up 0.1 per cent at $30.33.
In currency, the Australian dollar overnight hit a 10-month high of 65.95 US cents.
By late Friday afternoon the Aussie was trading for 65.87 US cents, up from 65.55 US cents at 5pm on Thursday.
In cryptocurrency, Bitcoin had hit an all-time high in what appeared to be an epic short squeeze, climbing 6.0 per cent to around $US118,000 ($A178,000).
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday dropped 9.1 points, or 0.11 per cent, at 8,580.1
* The broader All Ordinaries fell 6.4 points, or 0.07 per cent, to 8,820.3
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.87 US cents, from 65.55 US cents at 5pm on Thursday
* 96.65 Japanese yen, from 95.86 Japanese yen
* 56.37 euro cents, from 55.87 euro cents
* 48.64 British pence, from 48.16 pence
* 109.43 NZ cents, from 109.02 NZ cents
