The S&P/ASX200 fell 18.8 points by midday on Friday, down 0.21 per cent, to 9,065, as the broader All Ordinaries slipped 21.8 points, or 0.23 per cent, to 9,276.7.
"US equity markets closed lower overnight as a rebound in (US) Treasury yields and the unrelenting climb higher in energy prices reignited inflation worries, leaving investors in a cautious mood after the impact of (US) Treasury's buy-back plans the previous day faded," IG analyst Tony Sycamore said.
Utilities and energy stock outperformed the other sectors, as Brent crude topped $US93 a barrel for the first time in three weeks, after the Trump administration threatened "the toughest sanctions in history" against Iran, and left the door open to penalising its trading partners.
The financial sector rebounded 0.3 per cent after falling for nine of the past 10 sessions, clawing back a skerrick of the previous fortnight's eight per cent tumble, as housing market concerns swell.
Resources stocks were mixed, as precious metals continued their push higher on bond market concerns, with gold trading near 11-week highs at $US4,526 ($A6,350) an ounce.
The worries have reawakened Bitcoin — so-called digital gold — from its recent slumber, the cryptocurrency charging more than 15 per cent since Wednesday to three-month highs near $US75,000 ($A105,207).
BHP retreated from near all-time highs, easing to $65.33 as it struggled to find a catalyst to launch it to a new record peak.
Consumer discretionary stocks were heavy as Wesfarmers dragged and Super Retail handed back some of Thursday's post-earnings push after some broker downgrades.
The health care sector also came off the boil, falling 1.1 per cent after rallying as much as 14 per cent higher since Monday on the back of strong results from CSL and Pro Medicus.
In other earnings news, chicken meat supplier Inghams shares dropped roughly five per cent as cost growth and a softer wholesale market weighed as its full-year net profit fell by more than 60 per cent to $34.6 million.
Mexican-themed restaurant chain Guzman y Gomez shares rocketed more than 11 per cent higher as Australian sales surged more than 17 per cent to 1.4 billion in 2025/26, while its now completed US exit dragged the company to a $26.7 million net loss.
TPG Telecom shares also improved after mobile customer growth and cost-cutting drove a solid first-half earnings result.
Turning to listings, local artificial infrastructure player SCX.ai has tumbled on its ASX debut to 22 cents from its 30 cent offer price.
The Australian dollar is buying 71.34 US cents, up slightly from 71.22 US cents on Thursday at 5pm.
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