At noon AEST on Wednesday, the benchmark S&P/ASX200 index was down 48.4 points, or 0.6 per cent, to 8,022.8, while the broader All Ordinaries had dropped 47.9 points, or 0.58 per cent, to 8,249.2.
The fall came as traders took profits from two and a half weeks of gains ahead of Nvidia's second-quarter earnings report, due early Thursday, to see if the AI chipmaker could continue its jaw-dropping run of earnings blowouts.
Amid the frenzy over all things AI, Nvidia has surged to a $4.6 trillion market capitalisation, making it the world's second most valuable company, behind Apple.
Closer to home, the Australian Bureau of Statistics reported Wednesday that consumer prices rose 3.5 per cent in the year to July, down from 3.8 per cent in the year to June.
While forecasts had been for a 3.4 per cent inflation readout, IG analyst Tony Sycamore said the overall result was largely expected and unlikely to change the dial for the Reserve Bank at its meeting next month.
The Aussie briefly jumped above 68 US cents following the readout, its highest level this year.
Nine of the ASX's 11 sectors were lower at midday, with consumer staples higher and real estate basically flat.
The telecommunications sector was the biggest mover, dropping 1.5 per cent as Telstra, trading ex-dividend, fell 2.8 per cent.
Tabcorp was the biggest loser in the ASX200 at midday, falling 12.4 per cent to a four-year low of 49.5c after the gambling company posted a $1.4 billion loss after taking a huge writedown on the value of its wagering assets.
Incoming managing director and chief executive Gillon McLachlan said Tabcorp had built solid foundations since its demerger but was only part way through a turnaround, and would clearly not meet its "TAB25" targets set two years ago.
Woolworths was up 2.4 per cent to $36.32 after the supermarket group announced that its full-year sales were up 3.7 per cent to $67.9 billion.
In the heavyweight mining sector, BHP was down 1.8 per cent, Rio Tinto had dropped 1.3 per cent and Fortescue had fallen 1.8 per cent.
Goldminers were mixed even as the precious metal changed hands at $US2,516 ($A3,702) an ounce, just shy of its all-time high set earlier this week.
Newmont was up 0.2 per cent, while Northern Star had dropped 0.6 per cent and Evolution had dipped 0.1 per cent.
Mid-tier goldminers were faring better, with Ramelius up 2.6 per cent and Regius adding 2.1 per cent.
In the financial sector, the big four banks were also mixed. ANZ had advanced 0.6 per cent, Westpac was flat, NAB had dipped 0.4 per cent and CBA was down 0.2 per cent.
The Australian dollar was buying 67.99 US cents at midday, from 67.86 US cents at Tuesday's ASX close.
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