Asian stock markets opened sharply lower on Tuesday as investors adopted a cautious stance ahead of a week packed with central bank meetings and earnings from the world's largest technology companies, while developments in the Middle East remained firmly in focus.
South Korea's Kospi slumped 6.70%, Japan's Nikkei 225 fell 3.51%, and Australia's ASX 200 slipped 0.27%.
Investor sentiment remained subdued as markets prepared for interest rate decisions from the U.S. Federal Reserve, the Bank of Japan and the Bank of England. Traders are also awaiting quarterly results from major technology companies for evidence that heavy spending on artificial intelligence is translating into earnings growth.
The geopolitical backdrop continued to influence trading. President Donald Trump said the United States and Iran were engaged in diplomatic efforts aimed at ending the conflict, but cautioned that military action could resume if negotiations failed to produce an agreement.
Separately, Iran and Oman are working to reach an arrangement that would allow shipping through the Strait of Hormuz to resume normally, according to a Bloomberg report citing people familiar with the discussions.
Wall Street ended Monday's session on a mixed note. The Dow Jones Industrial Average gained more than 260 points, or about 0.5%, while the S&P 500 finished marginally higher as easing oil prices supported broader sentiment following the temporary pause in hostilities in the Middle East.
U.S. futures pointed to a muted start on Tuesday. Futures linked to the Dow Jones Industrial Average rose 24 points, or 0.05%, while S&P 500 futures slipped 0.03%. Nasdaq-100 futures declined 0.2%, reflecting continued caution toward technology stocks ahead of earnings.
Investors are expected to remain focused on signals from central banks, corporate earnings and geopolitical developments, with all three factors likely to shape market direction in the days ahead.
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