The Nasdaq composite closed just below break-even, but posted a weekly gain of 0.1 percent, notching its first eight-week winning streak since 2010. The tech-heavy index is also up about 4 percent over the past month.
"The markets are going to be choppy ahead of the Jackson Hole speech," said Mark Heppenstall, CIO of Penn Mutual Asset Management. "I think the market is looking for more clarity."
San Francisco Fed President John Williams signaled support for a rate hike in the near future in a Thursday afternoon speech. "In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later," he said.
Market expectations for a rate hike in September were just 18 percent Friday and 43 percent for December, according to the CME Group's FedWatch tool.
"You have Williams saying September would be a good time to raise rates and everyone is a bit anxious," said Peter Cardillo, chief market economist at First Standard Financial.
Williams's speech was just the latest piece of hawkish rhetoric from top Fed officials. Earlier this week, New York and Atlanta Fed presidents William Dudley and Dennis Lockhart said a September rate hike may be on the table.
Nasdaq composite over past monthSource: FactSet
Meanwhile, U.S. crude settled 0.62 percent higher, at $48.52 a barrel, posting strong weekly gains. WTI also posted its first seven-day winning streak since March 2015 Weekly rig count data from Baker Hughes showed 10 rigs came online this week.
This has been a "big, big week for crude, and that can only be positive," said Art Hogan, chief market strategist at Wunderlich Securities. He also said the recent rise in oil prices has been triggered by talks of a production freeze, currency moves and, "after two years, we're closer reaching a balance in supply and demand."
U.S. oil rose more than 3 percent Thursday and posted its highest settlement since July 1.
There are no major data sets due Friday, excluding the rig count, and as earnings season comes to a close, investors are looking ahead to Fed Chair Janet Yellen's annual speech in Jackson Hole, Wyoming.
"To me, the market is trying to reassess rate hike expectations," said Wunderlich's Hogan.