The index was on track for weekly gains as markets rallied due to an easing of US-Iran tensions and increasing hopes of a US-China trade deal. The Dow Jones Industrial Average briefly topped the 29,000 level for the first time, but it ended at 28,823.77, down 133.13, or 0.5 percent.
The S&P 500 fell 9.35 points, or 0.3%, to 3,265.35.
Among the 11-major S&P 500 sectors, falling US Treasury bond yields and crude oil prices continue to force the Financials Index and the Energy Index stay in the negative territory.
Frank Cappelleri, executive director at Instinet, said this week's moves voided a "potential bearish pattern" in the S&P 500, noting his upside target of 3,530 remains in play.
The S&P 500 and Nasdaq indices posted marginal gains on Friday after both hit record highs at the close of trading Thursday.
The Dow Jones Industrial Average on Friday crossed the 29,000 mark for the first time, as gains in technology and healthcare stocks offset concerns from a report showing slower-than-expected U.S.jobs growth in December.
The average hourly wage rose by 2.9 percent from the same month a year ago, showing a slight slowdown in growth. A measure of fear in the stock market had its largest drop in a week. That's the weakest growth since July 2018. On Thursday, two senior Fed officials said they saw no need to change short-term interest rates soon, and that they were upbeat about the economic outlook.
Across markets, worries about a recession have faded since previous year as central banks cut interest rates and pumped stimulus into the global economy.
"The employment rate is still below what it was before the financial crisis", Florian Hense, an economist at Berenberg Bank, told the WSJ.
Healthcare stocks rose 0.4%, led by Intuitive Surgical Inc, which reported a better-than-expected quarterly sales.
In commodities trading, benchmark US oil fell 52 cents to settle at $59.04 per barrel. Brent crude, the worldwide standard, fell 7 cents to end at $65.37 a barrel.
Diminishing worries about a U.S. -Iran war put more of the market's focus on the economy, corporate profits and other inputs that directly affect stock prices.
Wholesale gasoline rose 1 cent to $1.66 per gallon. Natural gas rose 3 cents to $2.17 per 1,000 cubic feet.