US stocks lifted on Friday after reports that President Donald Trump's polarising adviser Steve Bannon had been fired, but they slipped lower by the end of trading.
The decline marked the second week in a row that the major US indexes closed down for the week.
The Dow Jones fell 0.35% to 21,674.51.
Stocks had been trading in record territory earlier this year, leading some to forecast a correction. The indexes are still ahead since January, with the S&P 500 up about 7%, the Dow Jones Industrial Average up about 9% and the Nasdaq up about 14%.
Analysts say Mr Trump's war of words with North Korea and the domestic fight stirred by his defence of a white supremacist rally in Virginia provided a trigger for the recent losses.
"The market has been looking for an excuse to sell off for several months now," said David Schiegoleit, managing director of investment for US Bank Private Wealth Management.
Despite a steady economy, the uncertainty and high prices is likely to check future gains, he said.
"We may trend sideways for a while," he said.
Cheering from Mr Bannon's exit
Word of Mr Bannon's firing on Friday briefly rallied stocks, and brought cheers to the floor of the New York Stock Exchange,
Mr Bannon, a right-wing nationalist, helped shape the "America First" message of Mr Trump's election campaign and he supported some of Mr Trump's more radical economic positions.
In a recent interview with the left-leaning American Prospect magazine, Mr Bannon said the US was in an "economic war" with China, and called for aggressive protectionist moves.
Markets are hoping the firing means the White House will refocus on economic policies, such as tax reform and infrastructure spending, but the fallout isn't clear, said Lindsey Bell of CFRA Research. At a minimum, she expects it to reduce the day-to-day drama of the administration.
"I think it will result in less noise," she said.
How political uncertainty hurts
Mark Zandi, chief economist at Moody's Analytics, said political dysfunction has taken a toll on the US economy, since a fight over government debt precipitated a government shutdown in 2013.
"Political uncertainty is corrosive on economic growth," he said. "It's not existential, it's not something that pushes the economy into recession, but it weighs on growth. It makes people nervous, it makes businesses more cautious, it makes investors more wary and knocks the animal spirits out of the economy."
So far, the Trump administration's lack of legislative success in Washington has had limited impact. But the looming deadline to pass a federal budget and the need to lift the debt ceiling mean inaction is no longer an option, he said.
"That strategy of doing nothing or default of doing nothing no longer can work," he said.