The benchmark S&P/ASX200 index dropped for a third-straight session on Monday, falling 102.2 points, or 1.23 per cent, to 8,191.9, while the broader All Ordinaries fell 111.8 points, or 1.31 per cent, to 8,431.9.
The selloff came as markets assessed the Fed would likely leave US interest rates on hold for months, after official statistics revealed US non-farm payrolls rose 256,000 in December, far more than the 165,000 economists were expecting.
The unemployment rate ticked lower as well.
"The strong jobs report reaffirming the US economic exceptionalism narrative and shifting the base case for the US Fed to (take) an extended pause," wrote Westpac economist Jameson Coombs in an analysis.
Christian Floro, market strategist at Principal Asset Management, said the data suggested the US economy was continuing to thrive and the Fed would be very comfortable staying put in January.
The US dollar rose to a two-year high against a basket of other currencies following the jobs report, sending the Aussie to a nearly five-year low.
Nine of the ASX's 11 sectors finished lower, with utilities up 0.9 per cent and energy climbing 1.8 per cent on a significant spike in oil prices.
The tech sector was the biggest loser, falling 3.4 per cent as Wisetech Global dropped 3.6 per cent and Life360 retreated 5.4 per cent.
The financial sector dropped 2.1 per cent, with all of the big four banks down sharply.
Westpac fell 2.2 per cent to $31.87, NAB retreated 1.9 per cent to $37.22, ANZ lost 1.3 per cent to $28.90 and CBA subtracted 2.1 per cent to $152.76.
In the consumer discretionary sector, Myer and Premier Investments plunged by double digits after issuing trading updates.
Myer dropped 23.1 per cent to a three-month low of 88c after the department store chain said its sales were down 0.8 per cent in the 22 weeks to December 28.
"Trading during last year's key sales events including Black Friday was strong, but consumers remain cautious and focused on value given persistent cost-of-living pressures," executive chairwoman Olivia Wirth said.
Premier retreated 15.9 per cent to $27.78 after the Smiggle, Just Jeans and Peter Alexander owner reported soft sales in recent months.
"Retail conditions have remained challenging through 1H25," the company said.
Back in the financial sector, Insignia Financial rose 2.4 per cent to a more than three-year high of $4.22 after Bain Capital matched CC Capital Partners' $4.30-per-share, $2.9 billion offer for the wealth manager.
Wealth platform provider Netwealth dropped 9.9 per cent to $27.36 and Hub24 fell 6.2 per cent to $67.85, although Praemium grew 2.2 per cent to 71 cents.
In the heavyweight mining sector, BHP and Rio Tinto both dropped 0.2 per cent, to $39.59 and $118.79, while Fortescue added 0.3 per cent to $17.98.
In the energy sector, Woodside rose 2.0 per cent to $25.77 and Santos advanced 2.2 per cent to $7.12 as the price of Brent crude spiked to a five-month high of $US81 a barrel amid a stronger round of US sanctions on Russia's oil and gas sector.
The Australian dollar was buying 61.39 US cents, from 61.93 US cents at close of business Friday and its lowest level against the greenback since April 2020.
ON THE ASX:
* The benchmark S&P/ASX200 index on Monday fell 102.2 points, or 1.23 per cent, to 8,191.9
* The broader All Ordinaries fell 111.8 points, or 1.31 per cent, at 8,431.9
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 61.39 US cents, from 61.94 US cents at Friday's ASX close
* 96.73 Japanese yen, from 98.03 Japanese yen
* 60.06 euro cents, from 60.13 euro cents
* 50.52 British pence, from 50.35 pence
* 110.59 NZ cents, from 110.74 NZ cents
