Australian shares have resumed their journey lower, as inflation concerns fuelled by the Middle East energy crisis underpin a global bond sell-off and weigh on investor confidence.
The S&P/ASX200 fell 71.6 points by midday, down 0.83 per cent to 8,533, as the broader All Ordinaries lost 71.6 points, or 0.81 per cent to 8,757.9.
Local equities renewed their slump following Tuesday's bounce after US President Donald Trump walked back threats of fresh attacks on Iran.
But worries around the conflict's impact on global inflation hit Wall Street overnight, sending long-dated treasury bonds to their highest levels since 2007.
"Frankly, we're not overly convinced about the near-term prospects of a peace deal and suspect the motivation to hold fire stemmed from the weekend's fresh drone attacks on the UAE and Saudi Arabia," IG market analyst Tony Sycamore said.
Despite the gloomy outlook in the Persian Gulf, oil prices have remained relatively steady since Monday, with Brent crude trading near $US110.60 a barrel.
ASX-listed energy stocks improved by 0.4 per cent, with Woodside and Santos advancing while refinery operators and coal miners were mixed.
Uranium stocks continued to sell off, with Paladin Energy down by more than a fifth in just one week.
Raw materials producers were also under pressure, with mega miners BHP, Rio Tinto and Fortescue each giving up 1.9 per cent of their value by lunchtime as iron ore futures slipped to two-week lows.
Gold miners tumbled as the precious metal eased to $US4,481 ($A6,312) an ounce, the All Ordinaries gold sub-index down more than 27 per cent since the United States and Israel began launching air strikes on Iran on February 28.
Financials were heavy, down 0.7 per cent as all four big banks fell into the red, led by a 1.1 per cent slump in Westpac to $35.98.
Local IT stocks outperformed the other sectors, up 1.5 per cent, but ultimately languished after tumbling more than 40 per cent since reaching record highs in September 2025.
Consumer-facing stocks offered some resistance to the broader sell-off, with staples up 0.4 per cent and cyclicals gaining 0.6 per cent with rebounds in respective segment giants Woolworths, Coles and Wesfarmers.
In company news, coal port operator Dalrymple Bay rose 0.8 per cent to $5.37 after lifting its distribution guidance by seven per cent for the 2026 financial year to 26.375 cents per share.
Webjet's value tumbled by more than one-tenth to a record low of 40 cents per share, after Virgin told the travel company it planned to substantially cut commissions and commercial agreements from July 1.
The Australian dollar was buying 71.01 US cents, down from 71.34 US cents on Tuesday at 5pm, as the greenback appreciated on expectations that resurgent inflation will force the Federal Reserve to hike interest rates.
