The S&P/ASX200 edged down 7.5 points, or 0.09 per cent, to 8,523.7, on Thursday as the broader All Ordinaries lost 16.5 points, or 0.19 per cent, to 8,748.1.
Investors continued to be tentative in the face of major Middle East uncertainty and amid growing expectations of stagflation (rising inflation and weak economic growth) in the United States economy.
"If you were to take a long term view, the market will be fine no matter what," Moomoo market strategist Jessica Amir said.
"But we're probably going to see a stagflation environment, and this basically means that you need to focus on quality, which in this market has been tech companies able to grow profits the most out of anywhere."
Seven of 11 local sectors finished lower, but a surprise drop in jobs in May left the door open to a Reserve Bank interest rate cut in July, helping the rate-sensitive financials, real estate and consumer facing-stocks push higher.
Financials gained 0.9 per cent, with all four big banks in the green by the close, led by Westpac (up 1.7 per cent) and Commonwealth Bank, which spiked to an intraday record of $183.31 before settling at $182.85, it's best-ever close.
The materials sector continued to weigh on the bourse, down 1.8 per cent as lumbering iron ore prices dragged on large-cap miners and gold fell to a seven-day low of $US3,370 ($A5,215) an ounce.
BHP, Rio Tinto and Fortescue each lost between 1.7 per cent and 2.3 per cent as iron ore futures continued to plumb nine-month lows of $US94.40 a tonne.
Mixed miners and critical minerals plays also broadly bled lower, and there could be further downside before July 1 as investors lock in capital losses on losing stocks ahead of tax time.
Energy stocks fell 0.6 per cent despite continued strength in oil prices as Brent crude futures rose two per cent to just below $US76 a barrel.
The sector is still more than ten per cent higher than before Israel launched air strikes against Iran on Friday.
IT stocks fell 1.1 per cent as WiseTech Global announced its latest board departures and sold off by 1.9 per cent.
Technology One fell 1.5 per cent and accounting software Xero slipped 0.9 per cent, handing back some of Wednesday's gains.
Health care stocks were heavy, losing one per cent after CSL dropped 1.3 per cent ahead of next week's first meeting of US health secretary Robert F Kennedy Jr's revamped immunisation committee, which includes vaccine sceptics.
In other news, Kathmandu and Rip Curl owner KMD Brands fell almost four per cent after it announced warmer autumn weather had affected insulated clothing sales.
The Australian dollar is slightly lower against the greenback, buying 64.71 US cents, down from 65.07 US cents on Wednesday at 5pm AEST.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Thursday 7.5 points lower, or down 0.09 per cent, to 8,523.7
* The broader All Ordinaries gained 16.5 points, or 0.19 per cent, to 8,741.4
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.71 US cents, from 65.07 US cents on Wednesday at 5pm
* 93.99 Japanese yen, from 94.30 Japanese yen
* 56.43 Euro cents, from 56.53 Euro cents
* 48.27 British pence, from 48.33 pence
* Â 108.34 NZ cents, from 107.84 NZ cents
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