Australian shares slid on Friday's close as investors stayed cautious ahead of the US payrolls report, which could clarify the Federal Reserve's path toward expected rate cuts for the year.

The S&P/ASX 200 Index slid nearly 0.3% or 23.2 points to close at 8,515.7.

Analysts expect nonfarm payroll growth to have slowed to 125,000 in May, down from April's stronger-than-expected gains, Bloomberg reported.

A payroll print below 100,000 could stoke recession fears, while a stronger-than-expected reading may weigh on risk assets, the report said.

"The big risk event ahead is US nonfarm payrolls tonight," said Josh Gilbert, market analyst at Etoro.

"The uncertain macro backdrop continues to provide a hurdle for risk-on sentiment, and cooling US economic data is leaving investors unassured," Gilbert added.

In company news, SkyCity Entertainment Group (ASX:SKC, NZE:SKC) said it will file a legal action against Fletcher Building (ASX:FBU, NZE:FBU) and its construction arm, seeking over NZ$300 million in damages over delays to the New Zealand International Convention Center project.

Commonwealth Bank of Australia (ASX:CBA) said Friday it will add more benefits and offers and boost existing discounts in its customer recognition program, CommBank Yello. Its shares fell 1% at market close.

Lastly, Fortescue (ASX:FMG) Group Chairman Andrew Forrest said US tariffs are "not working", have contributed to rising inflation, and will lead to economic distress. Shares of the company rose 1% at market close.