The Dow Jones Industrial Average fell 90.38 points, or 0.39 percent, to 23,367.98, the S&P 500 lost 4.53 points, or 0.18 percent, to 2,581.11 and the Nasdaq Composite dropped 6.85 points, or 0.1 percent, to 6,786.44.
The US dollar was lower on Friday along with Wall Street stocks as investors pulled back from technology stocks and were skeptical President Donald Trump's Republican party would succeed in its efforts at overhauling US tax law.
US Treasury yields edged lower, in line with declines in US stock indexes and German 10-year bond yields, as risk appetite faded. The yield curve continued to flatten after strong US housing starts data for October.
Stocks and the dollar saw brief boosts on Thursday from the US House of Representatives' vote in favor of its version of a tax overhaul bill that would cut corporate taxes.
But the celebration was short-lived as the focus turned to a Senate battle over its rival bill and worries about whether the House and Senate will ever agree on a compromise.
"Traders are not jumping the gun here. They're looking to see what happens as the political sausage-making process runs its course," said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto. He added that while potential benefits to the dollar may be priced in, tax reform disappointment would hurt it.
The dollar was also dented by a report that Special Counsel Robert Mueller's team last month subpoenaed Trump's election campaign for documents containing specified Russian keywords from more than a dozen officials.
The dollar index fell 0.29 percent, with the euro up 0.22 percent to USD 1.1795.
The S&P 500 fell as investors eyed the prospects for tax cuts and positioned themselves for the close of earnings season and what is typically a quieter week as many traders take a break around Thursday's Thanksgiving holiday.
"Everybody is looking at that tax plan and wondering exactly what are the devils in the details," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
The Dow Jones Industrial Average fell 90.38 points, or 0.39 percent, to 23,367.98, the S&P 500 lost 4.53 points, or 0.18 percent, to 2,581.11 and the Nasdaq Composite dropped 6.85 points, or 0.1 percent, to 6,786.44.
The pan-European FTSEurofirst 300 index lost 0.29 percent and MSCI's gauge of stocks across the globe gained 0.13 percent.
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