The S&P/ASX200 fell 38.5 points on Tuesday, down 0.45 per cent to 8,585.9, as the broader All Ordinaries lost 39.2 points, or 0.44 per cent, to 8,875.8.
The leading benchmarks eased after the RBA left the cash rate at 3.6 per cent for a fourth straight meeting, but downside was limited as the central bank's cautious, data-dependent outlook offered no surprises to investors.
"You've seen, really a market that was very well priced for this situation - the interest rate futures and swaps priced this one almost perfectly," Pepperstone head of research Chris Weston told AAP.
"And we did have governor (Michele) Bullock speaking last week, and she effectively told us everything we needed to know."
However, there was a pronounced dip in equities and spike in the Aussie dollar when Ms Bullock mentioned the RBA's choices would likely be restricted to holding or hiking in 2026.
Interest rate markets were unchanged following the decision, still pricing a 25 basis point interest rate hike by August 2026, while some analysts tipped an increase as soon as February.
All 11 local sectors traded lower by the close, led by slumps in IT and energy stocks following a weak lead from Wall Street's tech-heavy Nasdaq index and after production resumed at an Iraqi oil field.
Woodside and Santos both slipped more than 1.2 per cent each, while coal producers traded lower and uranium stocks caught a bid.
The heavyweight financials sector grinded less than 0.1 per cent into the red, with the big four banks mixed as NAB shares rallied one per cent to $41.01, while ANZ eked a minor gain and CBA and Westpac slipped 0.6 per cent each.
Commonwealth Bank paid a record $792,000 in penalties over Consumer Data Right breaches, after voluntarily reporting the issue to the consumer watchdog.
Raw materials stocks dropped 0.6 per cent as the gold price treaded water near $US4,185 ($A6,297) an ounce, weighing on ASX-listed miners.
Iron ore giants were mixed as the underlying commodity's futures slipped to $US105.50 a tonne, with Fortescue posting gains while Rio traded flat and BHP slipped 0.4 per cent to $44.30 after entering a $US2 billion ($A3 billion) infrastructure agreement with a Blackrock subsidiary.
Liontown shares faded 2.3 per cent after the lithium miner executed an offtake agreement with Canmax Technologies, as competitor Pilbara minerals continued higher.
Rare earths producers were under continued pressure, with Lynas down fiver per cent to $12.93, on par with November lows.
In company news, TPG Telecom share fell 1.6 per cent after CEO Iñaki Berroeta linked a second death to a September outage in his evidence to a senate committee.
Austal was the top-200's best performer, up 3.7 per cent amid reports federal Treasurer Jim Chalmers will soon rule on whether South Korean counterpart Hanwha can increase its stake in the naval ship builder.
Health care stocks were under continued pressure, as heavyweight CSL sunk two per cent to $181.82, a 33 per cent discount to its early-August price, before a lukewarm financial result and restructuring plan prompted a major sell-off.
The Australian dollar is hovering near its recent 12-week highs, buying 65.42 US cents, on par with Monday at 5pm.
ON THE ASX:
* The S&P/ASX200 fell 38.5 points, or 0.45 per cent, to 8,585.9
* The broader All Ordinaries gained 39.2 points, or 0.44 per cent, to 8,875.8
CURRENCY SNAPSHOT:
One Australian dollar trades for:
* 66.42 US cents, from 66.46 US cents at 5pm on Monday
* 103.65 Japanese yen, from 103.14 Japanese yen
* 57.04 euro cents, from 56.99 euro cents
* 49.83 British pence, from 49.82 British pence
* 114.78 NZ cents, from 114.85 NZ cents
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