The local share market has fallen sharply after the chairman of America's powerful central bank declared rate hikes had "still some ways to go".
The benchmark S&P/ASX200 index on Thursday closed down 128.8 points, or 1.84 per cent, while the broader All Ordinaries dropped 127.2 points, or 1.77 per cent, at 7050.6.
The plunge came after Federal Reserve chairman Jerome Powell early on Thursday dismissed suggestions of a pause in the US rate hike campaign, as the central bank raised rates to America's highest levels since January 2008.
"We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected," he told reporters.
"Once again the market refocuses back to the story of 2022 and that is the determination of the Fed to push up interest rates," said State Street Global Advisors SPDR ETF equity strategist Julia Lee.
"Time and time again, markets have been surprised by the Fed's determination to push rates higher."
Despite more dovish tilts recently from central banks in Australia, Canada and Europe, it's becoming clearer that the US is on a different path, Ms Lee told AAP.
The ASX had rallied six per cent last month mostly on hopes that the Fed would pause or slow its rate hike campaign next month, so Thursday's hawkish rhetoric sent the market plunging.
Every sector except telecommunications was down, with the heavyweight mining sector falling three per cent.
Ms Lee said that the world's two largest economies, the US and China, are "both showing weakness in manufacturing which is bearish for commodities".
BHP dropped 3.2 per cent to $37.98, Fortescue Metals fell 2.9 per cent to $15.28 and Rio Tinto retreated 2.2 per cent to $90.56.
Goldminers Evolution, Newcrest and Northern Star were all down between 3.0 and 4.6 per cent.
The energy sector was down 1.2 per cent, with Woodside down 1.4 per cent to $36.74, despite a rise in the price of Brent crude.
Woolworths fell 3.5 per cent to $32.05 as the supermarket giant said Australian food prices surged 7.3 per cent in the September quarter.
All the big banks were significantly lower, with Westpac falling 2.4 per cent to $23.91, NAB retreating 1.8 per cent to $32.15, CBA down 1.4 per cent to $104.50 and ANZ falling 1.2 per cent to $25.68. Macquarie dropped 1.4 per cent to $166.45.
In tech, Bravura Solutions plunged 52.1 per cent to an all-time low of 63c after the financial software provider announced a strategic review and said it was clear its full-year earnings would "materially differ from analysts' consensus forecasts" with a loss of up to $5 million possible.
On the flip side, Janison Education rose 17.0 per cent to 55c after the online assessment provider reported first-quarter revenue of $12.8 million, up 95 per cent from a year ago.
The Australian dollar meanwhile hit a week-and-a-half low against its US counterpart. It was buying 63.68 US cents, from 64.20 cents at Wednesday's close.
Looking forward, Ms Lee said attention would next fall on the US non-farm payroll report, monthly labour market data that will be released on Friday night, Australia time. Also, the US midterm elections are on Tuesday, with control of the US House and Senate up for grabs.
ON THE ASX:
* The benchmark S&P/ASX200 index on Thursday dropped 128.8 points to 6857.9, a 1.84 per cent fall.
* The broader All Ordinaries dropped 127.2 points, or 1.77 per cent, to 7050.6.
One Australian dollar buys:
* 63.41 US cents, from 64.18 US cents at Wednesday's close
* 93.59 Japanese yen, from 95.14 yen
* 64.59 Euro cents, from 64.84 Euro cents
* 55.66 British pence, from 55.81 pence
* 108.99 NZ cents, from 109.65 NZ cents.