At noon AEST on Friday, the benchmark S&P/ASX200 index was down 103.1 points, or 1.34 per cent, to 7,579.9, while the broader All Ordinaries was down 96 points, or 1.21 per cent, to 7,841.5.
Wall Street fell overnight after the US GDP price index accelerated to 3.1 per cent, seasonally adjusted, in the first quarter.
That was a substantial jump from the 1.6 per cent growth in the last quarter of 2023 and led markets to push back the pricing of the Federal Reserve's first interest rate cut from September to November, ANZ economists Brian Martin and Daniel Hynes said.
The same data showed US GDP growth slowed to 1.6 per cent from 3.4 per cent the previous quarter, evoking the spectre of stagflation, where slowing economic growth teams up with accelerating price growth to torment central bankers.
However, the GDP price index - which is not the Fed's preferred inflation gauge - still showed disinflation was trending down in annual terms, Mr Martin and Mr Hynes said.
"We think the data broadly conform to our view that growth is slowing and inflation pressures are gradually abating," they said.
"However, short-term momentum is important for building confidence that this process will continue, and markets remain concerned about upside risks."
The March Personal Consumption Expenditures index - the Fed's preferred inflation gauge - is due out later on Friday and should show a clearer picture of the direction US inflation is heading.
Every official ASX sector was in the red at noon, with real estate stocks the worst hit, down 2.2 per cent.
The index was dragged down by its largest company, BHP, which sank 4.4 per cent to $43.25 after the iron ore heavyweight confirmed it had made a $60 billion bid for British copper miner Anglo American.
The merger would make BHP the world's biggest producer of copper, with about 10 per cent of existing supply, and would give the company greater exposure to nickel and the future of steel.
Anglo American said the board was reviewing the proposal, which would be preceded by separate demergers of the group's platinum business and Kumba iron ore operations in South Africa.
Fellow iron miners Rio Tinto and Fortescue climbed 0.8 per cent and 2.3 per cent, respectively, as the ore's price firmed to a two-week high.
Shares in goldminer Newmont leaped 13 per cent higher to $65.18 after it reported an increase in first-quarter revenue, driven in part by record gold prices.
The company announced it had offloaded a $330 million credit facility in Lundin Gold as it looks to monetise non-core assets to help finance its $26 billion acquisition of fellow goldminer Newcrest.
The big four banks all fell, with CBA down 1.6 per cent, NAB slipping one per cent and Westpac and ANZ 1.8 per cent lower.
Furniture retailer Nick Scali surged 12 per cent after completing a $46 million institutional placement to raise funds for its UK growth plans.
Sleep apnoea device producer ResMed climbed 7.3 per cent after announcing a 25 per cent boost to first-quarter profits, driven by increased demand for its products and cost improvements.
The Australian dollar was buying 65.30 US cents, from 65.22 US cents at Thursday's ASX close.
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