The local bourse broke its seven-session streak of wins on Monday.
The S&P/ASX200 fell 7.6 points, or 0.11 per cent, to 8149.2, as the broader All Ordinaries lost 6.6 points, or 0.08 per cent, to 8367.7Â
"Following the US, Australian futures indicate our market may only fall 0.2 per cent today, not as bad as the S&P500's 0.6 per cent drop," Moomoo market analyst Jessica Amir said.
"While investors may continue to take profits from risk-on assets such as banks following their cracking rebound, you'd expect this to continue ahead of Australian building approvals falling off a cliff."
Dwelling approvals fell 8.8 per cent in March, according to data from the Australian Bureau of Statistics, significantly worse than a forecast 1.7 per cent drop.
Local sectors were mixed, with six of 11 trading higher and financials down 0.5 per cent.
All big four banks were in the red, with Westpac the worst performer for a second day in a row, down 1.9 per cent after posting a slip in first-half profits yesterday.
Large cap miners were in the red, with BHP, Rio Tinto and Fortescue all down more than 0.7 per cent.
Gold miners were back in the green and helping to limit materials sector losses, as risk-off investor sentiment pushed the precious metal up 2.5 per cent to $US3,380.
Energy stocks rebounded 0.5 per cent after leading sector losses on Monday. Oil prices are still under pressure from planned output hikes from OPEC+.
Brent crude futures are back above the $US60 level, to trade at $US60.91 a barrel.
IT stocks were trading slightly higher, up 0.1 per cent, with NEXTDC surging 8.4 per cent to $13.72 after announcing it would boost capital expenditure to meet fresh data centre contracts.
At the other end, WiseTech Global fell 2.2 per cent after acknowledging US tariff impacts could be negative for the logistics technology company.
Australia's sovereign wealth fund, Future Fund, was warned recent market volatility and uncertainty could continue to push bond yields higher and rekindle inflation," chief executive Raphael Arndt said.
""We are seeing consequential changes in geopolitical, economic and market environments at the moment and that is causing volatility and uncertainty for investors," Dr Arndt said.
"Our expectation is that these conditions will lead to higher inflation and bond yields for an extended period."
The Australian dollar is buying 64.52 US cents, down from 64.69 US cents on Monday at 5pm.
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