The benchmark S&P/ASX200 fell 76.2 points by midday, down 0.85 per cent, to 8,936.3, as the broader All Ordinaries lost 71.1 points, or 0.76 per cent, to 9,224.7.
The top-200 began the day slightly below flat, but veered deeper into the red after the Reserve Bank's preferred trimmed mean annual inflation figure came in at 3.0 per cent in September, up from 2.7 per cent in the year to the June quarter.
While the surprise uptick in price growth was above forecasts, a December interest rate cut could still be on the cards, Deloitte Access Economics partner Stephen Smith said.
"As electricity price rebates roll off, headline inflation was always expected to bounce in the September quarter.
"Another bounce is expected in the March quarter of 2026," Mr Smith said.
"Today's inflation data is above expectations but does not change Deloitte Access Economics' forecast for a rate cut in December."
Other analysts tip borrowers wont see any interest rate relief until February.
Only three local sectors were higher by lunchtime, as financials dragged on the bourse with a 1.1 per cent dip, with all big four banks grinding lower.
Raw materials was a lonely success story, up 0.8 per cent thanks to a broad sector rebound.
ASX-listed gold miners dusted themselves off as the precious metal found buying support after correcting from the week before's all-time highs earlier.
Spot gold is trading hands at $US3,977 ($A6,026) an ounce, and miners Northern Star, Evolution and Newmont have staged rebounds of more than 1.7 per cent, while smaller players like Ramelius Resources (+2.8 per cent) bounced even higher.
BHP was the best of the large caps, up 0.4 per cent to $43.51 with iron ore futures holding their ground at roughly $US$105.70 a tonne.
Copper producers and mixed miners with copper exposure improved, as the base metal pushed towards a multi-month high.
Rare earths and critical minerals producers continued to ease from last week's buying spree after the US inked an investment deal with Japan worth up to $US400 billion ($A606 billion).
Energy stocks grinded 0.1 per cent lower, after oil prices slipped roughly two per cent on Tuesday, as investors weighed the impact of US sanctions on two of Russia's biggest oil companies and a potential OPEC+ output hike.
Uranium producers bounced back from recent weakness after the White House announced a $US80 billion ($A126 billion) investment in US nuclear power capacity.
Paladin shares charged more than 11 per cent higher, while Deep Yellow gained eight per cent, and Boss Energy surged 17.6 per cent after posting record production at below-guidance costs at its Honeymoon Project in South Australia.
The defensive consumer staples sector was the second-best performer, up 0.6 per cent after Woolworths rallied on first quarter sales of $18.5 billion, up 2.7 per cent on the same quarter in 2024.
Turning to company news, Ansell shares surged by more than six per cent to $35.45 after it lifted its 2026 financial year earnings forecast by more than three per cent.
Household furniture and accessories retailer Nick Scali rocketed 11.7 per cent higher after its Australia and New Zealand sales jumped a similar amount in September quarter, providing a boost to its projected first-half profits.
The Australian dollar is buying 65.98 US cents, up from 65.56 US cents on Tuesday at 5pm, jumping sharply to three-week highs shortly after Wednesday morning's inflation print.
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