The benchmark S&P/ASX200 index on Thursday finished down 36.3 points, or 0.46 per cent, to 7,811.8, while the broader All Ordinaries dropped 35.2 points, or 0.43 per cent, to 8,083.1.
Minutes released overnight from the rate-setting Federal Open Market Committee showed some appetite for raising US rates despite Fed chairman Jerome Powell telling reporters after the April 30-May 1 meeting that such a move was unlikely.
"Various participants mentioned a willingness to tighten policy further should risks to inflation materialise in a way that such an action became appropriate," the minutes said.
J.P. Morgan analysts said the term "various" was ambiguous in Fed-speak, but it could mean at least a quarter to a third of the committee were open to raising rates.
Westpac chief economist Besa Deda said US markets reacted by selling off across the board and shorter-dated US bond yields rose as markets reduced the chance of rate cuts in 2024.
Also early Thursday, AI chip maker Nvidia again beat earnings expectations in a closely watched announcement, posting $US28 billion ($42.3 billion) in first-quarter revenue, up 262 per cent from a year ago.
"The result today once again underscores that there is continued demand for AI, and that demand is showing no signs of abating," said eToro market analyst Josh Gilbert.
"It feels like AI is just getting started."
Five of the ASX's 11 sectors finished lower and six closed higher.
Tech was the biggest mover, climbing 2.3 per cent as Xero posted the biggest gains in the ASX200, rising 8.7 per cent to a two-month high of $132.22 after posting what E&P Capital analyst Paul Mason called a "relatively strong beat" to consensus earnings expectations.
"This result shows we're doing what we said we'd do," chief executive Sukhinder Singh Cassidy said in announcing that the Kiwi cloud accounting firm had grown its full-year revenue by 22 per cent to $NZ1.7 billion ($1.6 billion).
"We've delivered a strong and profitable FY24 result."
Mining was the biggest loser, dropping 2.2 per cent on losses across the sector.
BHP fell 2.9 per cent to $44.91 after the Big Australian unveiled its third offer for Anglo American, an all-scrip offer that values the British-based miner at $74 billion.
Anglo American rejected the bid, which BHP called its final offer, while also extending by a week the deadline for the two sides to make a deal.Â
Anglo's concerns appear to revolve around the proposal's structure, rather than its value, so there was some optimism the talks could result in a deal.
"BHP looks forward to engaging with the board of Anglo American to explore this unique and compelling opportunity to bring together two highly complementary, world class businesses," BHP chief executive Mike Henry said.
Elsewhere in the sector, Fortescue dropped 1.1 per cent to $26.99, Rio Tinto fell 2.0 per cent to $133.50 and goldminer Northern Star retreated 3.3 per cent to $14.20 as the yellow metal dipped $US15 to change hands at $US2,365 an ounce.
All of the Big Four banks finished in the red, with ANZ dropping 0.8 per cent to $28.38, NAB falling 1.1 per cent to $34.40, ANZ retreating 0.8 per cent to $28.38 and CBA finishing 0.6 per cent lower at $120.73.
The Australian dollar was buying 66.28 US cents, from 66.62 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 closed Thursday down 36.3 points, or 0.46 per cent, to 7,811.8.
* The broader All Ordinaries dropped 35.2 points, or 0.43 per cent, to 8,083.1.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.28 US cents, from 66.62 US cents at Wednesday's ASX close
* 103.82 Japanese yen, from 104.13 Japanese yen
* 61.22 Euro cents, from 61.32 Euro cents
* 52.07 British pence, from 52.25 pence
* 108.33 NZ cents, from 108.90 NZ cents.
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