The benchmark S&P/ASX200 fell 38.9 points by midday, down 0.44 per cent, to 8,774.8, as the broader All Ordinaries faded 58.3 points, or 0.64 per cent, to 9,039.9.
The session follows a sharp sell-off on Wall Street, where concerns about stretched valuations in US tech companies outweighed better-than-expected results from AMD, Uber and Shopify.
The local dip also came after the top-200 tumbled to five-week lows on Tuesday, after the RBA's widely-expected move to hold the cash interest rate at 3.6 per cent came with warnings about ongoing inflation risks.
The central bank noted while inflation had fallen substantially since its 2022 peak, it had picked up recently and revised its trimmed mean forecast higher to 3.2 per cent from 2.6 per cent for December and into the first half of 2026.
"Offering a glimmer of hope for mortgage holders, the RBA's updated cash rate path assumes the cash rate falls to 3.3 per cent in the second half of next year — a view based on market pricing — leaving the door open to further easing if warranted," IG Markets analyst Tony Sycamore said.
Raw materials stocks weighed heavily on the bourse for a third straight session, down 2.4 per cent as iron ore prices tumbled below $US104 a tonne, dragging on BHP, Rio Tinto and Fortescue.
Gold stocks remained under pressure as the precious metal's price slipped back into correction territory (more than 10 per cent from recent highs) to $US3,936 ($A6,072) an ounce.
Northern Star, Evolution and Ramelius Resources shares each lost more between three and four per cent by midday.
Rare earths and critical minerals producers were under selling pressure, with Lynas tumbling five per cent, while Liontown and Pilbara Minerals ground 7.1 per cent and 5.2 per cent lower.
Financials offered some support, up 0.7 per cent, with NAB (+0.8 per cent) and CBA (+1.4 per cent) doing the heavy lifting.
Insurers were broadly higher, and Medibank jumped 1.1 per cent to $4.89 after announcing it will acquire Better Medical, a network of GP and medical clinics spread across four states.
Energy stocks were also under pressure as risk sentiment sent the greenback higher, weighing on the oil price.
While Santos slipped 0.7 per cent to $6.30, Woodside managed to eke a gain after projecting a boost to net operating cash flow into the early 2030s at an investor presentation, owing to rising natural gas demand.
Elsewhere in the sector, coal miners eased, while uranium producers sold off sharply, battering names like Paladin (-8.3 per cent) and Deep Yellow (-5.9 per cent).
Australia's technology sector was a sea of red after the US-led tech sell-off, down 2.9 per cent as Life360, NextDC and Xero notched significant losses.
In other signs risk appetite is eroding, cryptocurrency Bitcoin has fallen below $US100,000 ($A154,495) for the first time since June, and is now in a technical bear market (falling 20 per cent or more from recent highs).
Interest rate-sensitive sectors such as real estate and consumer discretionary stocks continued to ease, while defensive segments like consumer staples, utilities and communications stocks edged higher.
The Australian dollar is buying 64.72 US cents, down from 65.28 US cents on Tuesday at 5pm.
The Aussie is headed for a sixth straight session of losses against the greenback, which has been clawing back its safe haven status as gold rolls off from its recent red-hot record run.
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