Stocks fell on Friday as market participants reacted to Republicans walking out of debt ceiling talks, which raised doubts that a deal may not be reached ahead of the June deadline.

Here's how the market settled to close out the week:

S&P 500 Index (SPY  ): -0.14% or -6.07 points to 4,191.98

Dow Jones Industrial Average (DIA  ): -0.33% or -109.28 points to 33,426.63

Nasdaq Composite Index (QQQ  ): -0.24% or -30.94 points to 12,657.90

Despite the negative performance on the day, all three major averages ended the week with gains. The S&P 500 rose 1.65% and the Nasdaq Composite climbed more than 3% -- both capping their best weekly performance since March. The Dow underperformed the broader market, only gaining about 0.4% for the week.

Much of those weekly gains were from Wall Street's strong performance on Thursday, as trader bet the White House and congressional leaders could reach a debt ceiling deal before the Memorial Day holiday towards the end of the month. However, stocks turned lower on Friday after GOP negotiations walked out of a debt ceiling meeting, blaming the White House.

"Until people are willing to have reasonable conversations about how you can actually move forward and do the right thing," Rep. Garret Graves told reporters on Friday. "We decided to press pause because it's just not productive."

Still, comments from Federal Reserve Chair Jerome Powell helped keep stocks afloat, as he said interest rates may not need to rise as much as previously projected to stabilize prices.

"The financial stability tools helped to calm conditions in the banking sector. Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation," Powell said during a monetary policy panel.

"So as a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals," he added, noting that the "extent of that is highly uncertain."

On the earnings front, Ross Stores (ROST  ) issued cautious guidance after delivering stronger-than-expected earnings overnight. CEO Barbara Rentler said the weaker outlook is due to inflation and a challenging macroeconomic environment as those factors weigh on lower-income consumers.

In single-stock news, Morgan Stanley (MS  ) CEO James Gorman said he plans to step down from his position within a year. He began his tenure in January 2010.

"The specific timing of the CEO transition has not been determined, but it is the board's and my expectation that it will occur at some point in the next 12 months," Gorman said Friday. "That is the current expectation in the absence of a major change in the external environment."

Looking ahead, market participants are expected to trade cautiously on news surrounding ongoing debt ceiling talks.