The benchmark S&P/ASX200 index ended 32.8 points, or 0.40 per cent lower, at 8,131.80 on Tuesday, while the broader All Ordinaries finished down 35 points, or 0.42 per cent, at 8,387.80.
The main drag on the ASX was uncertainty around the US election as voting got under way, with opinion polls suggesting Republican candidate Donald Trump and Democratic rival Kamala Harris are in a photo finish in the race to the White House.
"Investors are taking risk off the table leading into the US election, leading to a broad-based decline in the ASX200," said Capital.com senior market analyst Kyle Rodda.
"The race appears to be narrower than previously thought, leading to a reversal in the so-called Trump-trades," he added.
That meant every single ASX sector ended in the red with losses largely concentrated among the financials, utilities, healthcare and consumer stocks.
Investors were also disappointed after the Reserve Bank of Australia left the cash rate unchanged at a 13-year high of 4.35 per cent, and indicated it will be some time before inflation falls sustainably in the target range, prompting some economists to pare back expectations for rate cuts in coming months.
"The RBA is playing a patient game of waiting for output to come back to the economy's potential. This means the recent run of very weak growth is likely to continue," said Sean Langcake, head of macroeconomic forecasting at Oxford Economics Australia.
"We still expect to see the first rate cut in Q2 of 2025, but the balance of risks around this are shifting toward the first easing coming later, rather than sooner."
Banking stocks were among the worst affected, with Westpac down 1.5 per cent while CBA, NAB and ANZ also ended around 0.5 per cent lower. Macquarie Group and fintech Zip Co also ended down around two per cent each.
Consumer staples were among the worst-performing sectors, with Woolworths and Metcash down nearly 1.0 per cent each and A2Milk losing 2.0 per cent of its value.
Healthcare stocks also slipped with Sigma Healthcare dropping 2.2 per cent after a block trade as it awaits a ruling by the competition regulator on its proposed $8.8 billion merger with Chemist Warehouse. CSL and Healius were also down nearly one per cent each.
Domino's Pizza Enterprises was among the biggest losers on the benchmark index, after the fast food retail chain announced long-time chief executive Don Meij would step down effective November 6.
Shares in the company hit their lowest level in nearly two months and ended 6.3 per cent lower at $31.60.
Meanwhile, the Australian dollar held on to intraday gains after the RBA decision. It was buying 65.98 US cents at the close, compared to 66.06 US cents on Monday.
ON THE ASX:
* The benchmark S&P/ASX 200 index finished 32.8 points, or 0.4 per cent lower, at 8,131.80 on Tuesday.
* The broader All Ordinaries was down 35 points, or 0.42 per cent, at 8,387.80.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.98 US cents, from 66.06 US cents at Monday's ASX close
* 100.53 Japanese yen, from 100.34 Japanese yen.
* 60.66 Euro cents, from 60.63 Euro cents.
* 50.92 British pence, from 50.86 British pence.
* 110.28 NZ cents, from 109.99 NZ cents.
