The S&P/ASX200 edged 14.6 points lower by midday, down 0.16 per cent, to 8,717.4, as the broader All Ordinaries lost 6.5 points, or 0.07 per cent, to 8,958.5.
"Negotiations between the US and Iran remain an outstanding concern and a source of potential volatility going forward," Capital.com senior market analyst Kyle Rodda said.
"Price action points to a market placing its proverbial bets that a deal will get done, despite the apparent differences between both parties regarding Iran's uranium enrichment, nuclear program and control of the Strait of Hormuz."
Only IT and basic materials stocks were trading clearly higher by lunchtime, with local tech up more than five per cent after Wall Street's tech-heavy Nasdaq hit fresh highs on Friday.
Mega miners BHP and Rio Tinto each climbed more than 0.7 per cent as copper prices advanced but iron ore futures hovered near $US105 a tonne.
Gold stocks were broadly higher as the precious metal crept up to $US4,530 ($A6,305) an ounce.
Lithium producers PLS and Liontown each charged more than 2.7 per cent into the green, while rare earths producers Lynas and Iluka lost ground.
The heavyweight financials sector was sluggish, easing 0.4 per cent as CommBank led three of its big four competitors lower, while NAB eked out a 0.2 per cent improvement to $37.39.
Real estate stocks were also heavy, slipping one per cent as Lendlease fell to a multi-year low after announcing the sales of its Santa Giulia mixed use project in Milan for roughly $250 million.
Health care stocks plunged 1.5 per cent lower in a broad-based sell-off.
Pro Medicus was a notable exception, its shares soared more than nine per cent higher to $144.79 after it signed $46 million in new and renewed contracts with health providers Allegheny and TidalHealth.
Consumer-facings stocks were under pressure, with staples tumbling 1.4 per cent and cyclicals slipping 0.5 per cent.
In company news, TPG Telecom has appointed former Telstra executive Nerida Caesar to its board as an independent non-executive director.
Shares in fashion retailer Cettire rocketed higher by more than a fifth after it inked a partnership with TMall Global, Alibaba Group's cross-border e-commerce platform.
Looking ahead, the Australian Bureau of Statistics will release April GDP figures on Wednesday, and Reserve Bank governor Michele Bullock will discuss the federal budget before the Senate Economics Legislation Committee on Thursday.
The Australian dollar is buying 71.86 US cents, up from 71.61 US cents on Friday at 5pm.
