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The benchmark ASX 200 slumped 59.20 points or 0.67 per cent to 8818.50 points, while the broader All Ordinaries dropped 56.30 points or 0.62 per cent to 9094.90.
The Aussie dollar also fell 0.26 per cent to buy 66.71 US cents.
On an overall poor day for the market, eight of the 11 sectors fell, with property, retailers, materials and healthcare dragging the market lower.
Utilities, energy and technology stocks finished higher.
Utilities led the gains with Origin Energy up 1.27 per cent to $12.74, AGL finished up 0.35 per cent to $8.64 and Meridian Energy 1.80 per cent to $5.10.
Energy stocks continued to rise, with Woodside up 1.32 per cent to $24.60 and Ampol gained 0.59 per cent to $30.60.
Santos bucked the trend, slipping 0.52 per cent to $7.65.
Meanwhile consumer discretionary stocks were one of the main drags on the market. Wesfarmers shares slumped 1.88 per cent to $92.43, Harvey Norman dropped 2.04 per cent to $7.22 and Breville Group fell 0.75 per cent to $31.84.
Australia’s market fell as investors await a key decision out of the US.
CBA currency strategist Carol Kong says US markets are expecting just short of 150 basis points in rate cuts from the Federal Reserve through 2026, with any shortfall likely to hit the market.
“The market’s aggressive rate cut pricing sets a high bar for Chair Powell and the updated ‘dot plot’ to out-dove the market,” she said.
Ms Kong predicts a one-in-four chance of an outsized 50 basis point cut when the US Federal Reserve meets overnight, but expects three 25 basis point cuts by year end.
Markets are currently pricing in a 100 per cent chance of a 25 basis point cut.
She says market participants will also be interested in the vote count with the board likely split on the size of the interest rate cut.
Capital.com senior market analyst Daniela Hathorn warns shares could drop in the short-term if the Federal Reserve doesn’t indicate further rate cuts.
“The upside may resume after the meeting; however, the risks are slightly skewed to the downside as Powell and his team have a lot of dovishness to live up to,” she said.
The Federal Reserve’s decision and forecasts are due at 4am AEST.
In company news, Australia’s largest miner announced job cuts.
BHP Mitsubishi Alliance told workers on Wednesday that 750 jobs would be axed when one of its largest metallurgical coal mines is put into maintenance mode in November.
“I think that is un-Australian, I think they should keep investing,” Deputy Premier Jarrod Bleijie said following news of the job losses.
Corporate Travel continues its trade suspension, which started on August 22 when it revealed the businesses auditors had questions about whether accounts in the European region may need adjustment.
DroneShield gained 1.9 per cent to $3.20 after telling the market it gained a $7.9m contract with the US Defence Department.
New Hope sank 8.3 per cent to $4.20 on Macquarie’s latest rating which fell from a buy to neutral.
