Australian shares fell 53 points, or 0.6%, to 8,697 in Tuesday morning trading, reversing modest gains from the previous session as overnight losses on Wall Street weighed on sentiment. AI stocks sold off sharply after industry warnings about risks, while surging oil briefly pushed U.S. Treasury yields to 5%. Investors also adopted a cautious stance before China releases August new home prices, industrial output and retail sales later Tuesday. Domestically, cost pressures and expectations of prolonged Reserve Bank tightening persisted, with markets pricing a 90% chance of a rate hike this month. Healthcare, non-energy minerals and energy minerals led declines, although consumer, logistics and services stocks helped contain the broader loss. The big four banks fell between 0.5% and 0.8%, while BHP Group dropped 2.3%, Macquarie declined 1.9% and Evolution Mining slid 3.8%. Wisetech Global rose 3.2%, Xero gained 3.0%, REA Group advanced 2.1% and CSL increased 1.2%.