Here's what could fluster stocks on Wall Street and abroad

Traders could exit August positioned defensively, locking in some of the summer's stock market gains as headline risk from Ukraine remains high ahead of a three-day weekend.

Stocks closed slightly weaker Thursday with Ukraine weighing on markets, particularly during European trading hours. Europe could rule at least the early part of the day again Friday.

Traders are awaiting European inflation data, released well ahead of the U.S. open Friday morning. It is expected to show a decline to 0.3 percent year-over-year, and the number is expected to weigh heavily in the European Central Bank's decision-making process at its rates meeting next week.

Speculation that the ECB would announce further policy easing when it meets next Thursday has been fueling buying in European sovereign debt. U.S. yields have also touched lows, with the 30-year bond yield at 3.07 percent Thursday, the lowest level since May 2013.

"It's creating a gravitational pull on U.S. Treasury yields," said Anthony Valeri, investment strategist for LPL Financial.

Read MoreThere's 'no way' market will crash: Acampora

"(European yields) may go a little lower, but I think they're close to bottoming. I think we need a positive surprise out of the ECB to get them to reverse course," Valeri said. There's a 50 percent chance the ECB could announce purchases of asset-backed securities next week, he added.

Meanwhile, strategists expect the S&P 500 to take another run at the 2,000 level in the near future. After closing just on the 2,000 mark Tuesday and Wednesday, the S&P closed slightly lower at 1,996 Thursday.

NYSE New York Stock Exchange traders markets
Brendan McDermid | Reuters

"When you get a nice round number on an index, it takes a few instances to break through it conclusively," Valeri said. "We still think we'll tack on a few percent before the end of the year."

The S&P enters the final day of August with a 3.4 percent gain, which would give it the best August performance in 14 years and about a 5 percent gain since the start of July. Markets are closed Monday for the Labor Day holiday and reopen Tuesday.

Read MoreWhat a stock market bear likes right now ...

There are several economic reports expected Friday, including personal income and spending at 8:30 a.m.; Chicago PMI at 9:45 a.m., and consumer sentiment at 9:55 a.m.

September has the reputation of being a volatile month, more likely to see a decline in stocks than gain. But in the last five years, the S&P 500 has been positive four times. When looking at Septembers that follow a strong August, the odds, however, are against another positive month. There have been 22 times that the S&P has risen more than 3 percent in August since 1928, and in three quarters of those cases, stocks were lower in September.

Read More8 out of 10 active managers striking out this year

The American Association of Individual Investors' bullish index rose above 50 this week for the first time since last December. The measure went to 51.92 and Bespoke notes that spikes above 50 have been rare since the start of the bull market in 2009.

Bespoke also notes that bullishness does not necessarily indicate a lower market. In the next week, the S&P was up six of seven times for an average gain of 0.8 percent. Over the next month, the S&P was higher in every case for an average 1.2 percent gain, and was more than 5.2 percent higher after a year.

—By CNBC's Patti Domm