Australian shares fell sharply on Friday, following losses on Wall Street as the chairman of the US Federal Reserve warned of aggressive interest rate hikes next month.
The ASX 200 index closed 1.6 per cent lower at 7,473 points.
The Australian dollar was moderately weaker at 73.35 US cents, following a 0.5 per cent fall.
Almost every ASX sector was in the red, with technology and materials being the worst performers — down 3.1 per cent and 2.6 per cent respectively.
The stocks which suffered the heaviest losses include Megaport (-9.9pc), Paladin Energy (-7.8pc), OZ Minerals (-6.5pc), Pointsbet (-7.7pc) and South32 (-5.1pc).
On the flip side, shares in Endeavour Group (+2.1pc), Domain (+1.4pc), CSL (+1.3pc), United Malt (+1.2pc) and JB Hi-Fi (+1.2pc) made solid gains.
Wall Street down after Fed Reserve rate hike warning
On Wall Street, the Dow Jones Industrial Average lost 1 per cent, to close at 34,792, the S&P 500 fell 1.5 per cent to 4,393, and the Nasdaq Composite slid 2 per cent to 13,174.65.
It was after the US Fed chair, Jerome Powell, said a 50-basis-point interest rate hike would be "on the table" when the central bank meets next month to discuss monetary policy.
Inflation in the US is running at about three times the Fed's 2 per cent target.
""It is appropriate to be moving a little more quickly," Mr Powell said.
San Francisco Federal Reserve president Mary Daly said she supported raising the US central bank's target for overnight borrowing costs to 2.5 per cent by the end of this year, and signalled it could go even higher.
The talk about rate hikes saw US equity markets turn from positive earnings.
"The market is pricing in at least 50 basis points in May and June," George Catrambone, head of trading at DWS Group, said.
"Powell and many other Fed speakers have been saying they want to get to control as quickly as possible, and that is saying to the market that they are going to go aggressively."
Bond yields also breached fresh multi-year peaks. Yields on the two-year US Treasury, the most sensitive to interest changes, hit their highest in three years before coming off slightly.
"Markets are now pricing in 175 basis points of a rate hike over the next three meetings with another half-point hike fully priced for the June meeting."
High-growth stocks, including those of Meta Platforms, Alphabet and Amazon, fell as investors fretted about how the higher-rate environment would impact their future growth potential.
Netflix slumped for a second day after its quarterly earnings revealed the company's first drop in subscriber numbers in a decade, with the streaming giant warning further declines are likely.
On the flip side, Tesla rose after its results beat Wall Street expectations, with higher prices helping it overcome supply-chain chaos and rising costs.
Airline stocks also did well. United Airlines Holdings and American Airlines Group climbed after they predicted a return to profit in the current quarter due to booming travel demand.
Commodities slide
Gold fell 1 per cent to $US1,954.11 an ounce, around its lowest level in two weeks.
Iron ore was down 0.14 per cent at $US153.35 per tonne, according to Commsec.
Brent crude added 1.5 per cent at $US108.45 per barrel, while West Texas Intermediate crude gained about 1.6 per cent, to $US103.88 per barrel.
In Europe, the pan-European STOXX 600 index gained 0.3 per cent, Germany’s DAX gained 1 per cent, and Britain's FTSE finished almost flat.
