The S&P/ASX 200 index had slid 102.5 points, or 1.3 per cent, to 7,861.2 by Thursday's close, with the broader All Ordinaries falling 111.2 points, or 1.4 per cent, to 8,094.3.
The steepest losses were felt across technology stocks, down 2.7 per cent, with all sectors finishing lower.
WiseTech fell 3.2 per cent ,and Xero shares lost 3.5 per cent.
Energy stocks notched their sixth day in decline, sinking 1.8 per cent on Thursday, while consumer discretionary shares shed almost two per cent.
US equities tumbled to their worst day in over a year, led lower by tech and mega-caps.
A few factors were driving weakness across Wall Street including valuations reaching frothy levels, the North American summer and the upcoming election, Capital.com senior financial market analyst Kyle Rodda said.
Soft inflation data a few weeks earlier and expectations of a Federal Reserve rate cut in September had also sparked a technical breakdown in big tech stocks, he added.
Attention was expected to turn to gross domestic product data due from the major economy overnight, with economists anticipating the pace of growth to tick higher in the June quarter compared to the three months to March, supported by consumer spending.
Shares in miner Fortescue slumped 5.5 per cent to $20.14, even with high iron ore shipments forecast for the 2025 financial year, and June quarter shipments 10 per cent higher than the same period last year.
BHP slipped 0.9 per cent to $41.19, while Rio Tinto lost 1.4 per cent to $112.81.
The big banks all finished weaker, with Commonwealth Bank inching 0.1 per cent lower to $132.60, Westpac down 0.7 per cent to $28.34, NAB falling 0.9 per cent to $37.24, and ANZ dipping 0.6 per cent to $29.32.
An update from ANZ on investigations into alleged misconduct within its markets division revealed several employees had already been fired and suspended from the country's fourth biggest bank.
Macquarie shares finished down 3.4 per cent to $201.61, with first quarter profit broadly in line with its returns from the same time last year in a disappointing outcome for the investment bank.
Shares in employment marketplace Seek fell 1.7 per cent following news the firm had written down the value of its Chinese marketplace Zhaopin by $141 million, in part attributed to a weaker-than-expected Chinese economy.
The Australian dollar was buying 65.46 US cents, down from 65.92 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index fell 102.5 points, or 1.3 per cent, to 7,861.2 on Thursday's close.
* The broader All Ordinaries declined 111.2 points, or 1.4 per cent, to 8,094.3
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.46 US cents, from 65.92 US cents at Wednesday's ASX close
* 99.92 Japanese yen, from 101.82 Japanese yen
* 60.36 euro cents, from 60.75 euro cents
* 50.76 British pence, from 51.13 British pence
* 110.65 NZ cents, from 111.23 NZ cents
