The S&P 500 closed 0.18% lower at 2,425.55, after falling as much as 0.5%.
The White House response, as Eamon Javers of CNBC reported, went something like this: it released a statement reaffirming Cohn's commitment to his role, but then issued a new statement without the words "intends to stay" in, that caught people's attention. Nothing's changed." The official later clarified to say, "Nothing has changed. He has also been mentioned as a possible future successor to Federal Reserve Chair Janet Yellen, once that job opens up.
Cohn, a former Goldman Sachs president, has been leading the effort to overhaul the US tax code, according to Bloomberg.
Also remaining in the White House is Dina Powell, deputy national security adviser.
Chairman of the Joint Chiefs of Staff Joseph Dunford has strongly endorsed the statements by the leaders of the four major USA military services, who spoke out against racism and extremism after last weekend's violence in Charlottesville, Virginia.
The KBW Bank Index had dropped more than 1 percent in afternoon trading on concern prospects for cutting taxes and regulations would dim if Cohn left.
Commenting on the market backdrop, Craig Erlam, senior market analyst at Oanda, said: "We're seeing risk aversion in the markets again on Friday, with the possibility of a self-inflicted crisis within Donald Trump's White House and another terror attack, this time in Barcelona, weighing on risk appetite". The dollar bounced back but failed to move higher against the yen or the euro and surrendered gains late in the day against the British pound.
The dollar index.DXY, which tracks the greenback against six major currencies, rose 0.35 percent for the week. US stocks and Treasury yields extended declines in the afternoon in NY, after a van plowed into pedestrians on one of Barcelona's busiest streets, causing multiple deaths and injuries in an attack authorities are treating as terrorism.