But the Fed opened up the possibility of cuts last month, citing muted inflation pressures and an economic outlook clouded by a US trade war and slower global growth.
The index is now about 0.7% below its all-time high set Wednesday. E-minis for the S&P500 declined 0.25%. Seoul sank 2.2 percent, hit by a simmering trade row between South Korea and Japan. Tokyo's Nikkei 225 lost 1% to 21,520.70.
Chinese shares were heavily sold off with the blue-chip index down 2.2% and Hong Kong's Hang Seng index down 1.8%. The Lira was down 2.5% at the time of writing as investors became more confident that interest rates will begin to decline at a fast pace. The previous range was "neutral".
Since the start of the year, global equities have generally been bolstered by expectations that central banks will keep interest rates at or near record lows to boost economic growth. But a report Friday showing that USA employers added a robust 224,000 jobs in June has dimmed Wall Street's hopes for a more aggressive half-point cut.
Given the strength shown in that data, investors now expect U.S. Federal Reserve Chairman Jerome Powell to go slow on rate cuts this year. While a 25 basis-point rate cut is "still pretty much expected by everyone, no one is talking up the odds for a double-whammy 50 point rate cut", he said.
Traders will be listening closely when Fed Chair Jerome Powell testifies to Congress on monetary policy and the state of the USA economy on Wednesday.
Looking ahead, Mark Lister, head of private wealth research for Craigs Investment Partners, said globally, the focus this week will be on the testimony to US Congress from Fed Chair Jerome Powell.
"Nevertheless, the US dollar should continue to trade on a firmer footing in the near term, given downside risks from a larger rate cut have diminished".
There was some positive news on the protracted China-US trade war, with White House Economic adviser Larry Kudlow confirming that top representatives from the United States and China will meet in the coming week for trade talks.
"Whether the negotiators can find a solution to the hard structural issues that remain between the two sides is another matter, and Kudlow cautioned there was "no timeline" to reach an agreement", National Australia Bank strategist Rodrigo Catril said.
Turkey's lira slid to as low as 5.8245 to the dollar, its lowest in two weeks, and was last down 1.7% at 5.73.
Erdogan sacked Cetinkaya for refusing the government's repeated demands for interest rate cuts, laying bare differences over the timing of cuts to revive the recession-hit economy.
Against the yen, the USA dollar advanced to as high as 108.640 on Friday, its highest since June 18.
The euro was a tad lower at $1.1224, not far from a 2-1/2-week low of $1.1205 touched on Friday.
USA businesses added 224,000 new jobs last month, the Labor Department reported earlier on Friday, an outcome that led bond investors to increase their bets the Fed would only reduce rates by a quarter of a percentage point at its policy meeting this month.
"The testimony this week will be crucial around how they are seeing the evolution of the US economy", Anne Anderson, head of fixed income at UBS Asset Management in Sydney, told Bloomberg TV.