The benchmark S&P/ASX200 index on Wednesday finished down 24 points, or 0.3 per cent, to 7,987.9 while the broader All Ordinaries fell 21.8 points, or 0.27 per cent, to 8,195.2.
Overnight oil prices plunged, with Brent crude tumbling to less than $US69 a barrel for the first time in almost three years on concerns about oversupply and weak demand.
Traders also watched as Kamala Harris and Donald Trump squared off for what was scheduled to be their only US presidential debate ahead of the November election.
Saxo Markets head of FX strategy Charu Chanana said Ms Harris had won the debate judging from the reaction on the prediction market PredictIt, which could cause headwinds for crypto and energy stocks.
Domestically, Reserve Bank assistant governor Sarah Hunter told an economic forum in Sydney that while Australia's labour market had cooled, it was still too "tight" - meaning there was room for job vacancies to fall without a sharp increase in the unemployment rate.
NAB economist Taylor Nugent said Mr Hunter's speech suggested the RBA would be in no hurry to cut rates in the near term, with NAB predicting a first cut in May 2025.
Six of the ASX's 11 sectors finished lower and four closed higher, with consumer staples basically flat.
Financials were the biggest losers, dropping 1.5 per cent as the big banks lost ground.
CBA dropped 1.9 per cent to $141.05, ANZ was down 1.8 per cent to $30.84 and NAB and Westpac both retreated 1.5 per cent, to $38.38 and $31.84 respectively.
In the heavyweight mining sector, lithium explorers posted double-digit gains in a possible short squeeze after a UBS analyst said Chinese battery giant CATL had halted lithium mining at two of its mines in southeast China.
Mineral Resources soared 16.0 per cent to $35.12, Pilbara added 13.1 per cent to $2.67 and Arcadium Lithium climbed 11.5 per cent to $3.70.
All three companies remain well in the red for the year, however.
Elsewhere in the sector, BHP rose 1.8 per cent to $39.34, Fortescue climbed 2.6 per cent to $16.30 and Rio Tinto advanced 1.2 per cent to $108.35.
Goldminers were also higher as the precious metal changed hands at a near-all-time high of $US2,525 an ounce.
Northern Star advanced 1.6 per cent, Evolution grew 2.1 per cent and Newmont added 0.9 per cent.
In the energy sector, Woodside fell 2.2 per cent to a two and a half year low of $23.46 and Santos subtracted 1.2 per cent to a similar low of $6.85 amid the plunging oil price.
In the tech sector, NextDC slid 5.6 per cent to $16.85 after the data centre owner completed a $550 million placement to acquire more data centres in Asia.
In the consumer discretionary sector, NextEd Group plunged 30 per cent to an almost seven-year low of 10.5c after the tertiary education provider detailed how the Albanese government's proposed caps on international student visas might affect its business.
Back in the energy sector, tiny Melbana Energy soared 52.6 per cent to a two-month high of 2.9c after the Sydney-headquartered company announced work was progressing on its oil well in Cuba.
The Australian dollar was buying 66.64 US cents, from 66.73 US cents at Tuesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Wednesday down 24 points, or 0.3 per cent, at 7,987.9
* The All Ordinaries lost 21.8 points, or 0.27 per cent, at 9,793.9.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.64 US cents, from 66.73 US cents at Tuesday's ASX close
* 94.20 Japanese yen, from 95.43 Japanese yen
* 60.33 euro cents, from 60.40 euro cents
* 50.92 British pence, from 50.98 pence
* 108.29 NZ cents, from 108.35 NZ cents
