By Riva Gold

Stocks slipped while the dollar strengthened Friday after comments from Federal Reserve officials led investors to up their bets that the bank may be on course to raise rates.

Futures pointed to a 0.3% opening loss for the S&P 500, following declines in Europe.

The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, was last up 0.4%.

San Francisco Fed President John Williams said Thursday that the central bank should move to raise interest rates "sooner rather than later."

New York Fed President William Dudley also expressed optimism about the outlook for the U.S. economy, noting "the strong jobs reports released over the past two months have helped allay concerns that arose earlier this year that job growth was beginning to stall."

The prospect of higher U.S. interest rates tends to strengthen the dollar but weigh on stock markets.

The Stoxx Europe 600 fell 0.7% in morning trade, led lower by the auto sector. Shares of Daimler AG were down 1.5%, while Ferrari NV was down 2.2%.

European bank shares also declined, with shares of UniCredit SpA off 3.6% and Deutsche Bank AG off 2.6%.

A slight downturn in the oil price also weighed on sentiment in Europe, with Brent crude oil down 0.7% at $50.52 a barrel.

Oil prices entered a bull market on Thursday, sending Wall Street to a higher close. Traders had drawn encouragement in recent sessions from falling U.S. stockpiles and talks of a production cap by the Organization of the Petroleum Exporting Countries.

In Asian trade, Japan's Nikkei Stock Average rose 0.4% as the yen pulled back slightly and oil prices rose.

Shares in Hong Kong ended slightly lower after rising in the previous session.

More broadly, volatility has receded in recent weeks, with summer holidays keeping trading volumes light.

U.S. stocks are on track to end the week almost unchanged, as major bourses have bumped up against their all-time best levels.

"Even though growth in the U.S. is pretty sub-par, it's also pretty stable, and we can't say that about other areas," said Marie Schofield, portfolio manager and chief economist at Columbia Threadneedle Investments.

Shares in Japan and Europe have fared worse since Monday, on track to lose 2.2% and 1.6% respectively.

There, "markets are juggling weak growth, unconventional monetary policy and the impact that is having on the financial sector," Ms. Schofield said.

"Much depends on momentum, and much depends on central banks."

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

August 19, 2016 05:40 ET (09:40 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.