Asian shares wobbled on Tuesday and bonds were firm as a profit warning from Walmart put consumption and company earnings under a cloud ahead of what is likely to be another sharp US interest rate hike.
MSCI's broadest gauge of Asia stocks outside Japan meandered just above flat. Japan's Nikkei fell 0.2% and S&P 500 futures were down 0.4%.
US retailer Walmart Inc cut its profit forecast on Monday and said customers were paring back discretionary purchases as inflation bites household budgets. Shares fell 10% after hours and rivals Target and Amazon also slid.
Investors are also awaiting a likely 75 basis point Federal Reserve interest rate increase later this week - with markets pricing about a 10% risk of a larger hike, as well as waiting to see whether economic warning signs prompt a shift in rhetoric.
"We are leaning to the view that 75 bps is most likely but won't be the end unless they see some demand destruction and some tempering of inflation," said John Milroy, an investment adviser at Ord Minnett.
"We are fearful they have to materially slow the US economy further."
Big technology companies such as Apple, Microsoft and Amazon.com are due to report earnings this week.
"The market has stabilized (from rate hike expectations)," said Redmond Wong, Greater China market strategist at Saxo Markets in Hong Kong. "The focus is now on earnings."
Chinese stocks managed small gains, with Hong Kong's Hang Seng Index up 0.4% and China's benchmark CSI300 Index up 0.3% in early trade.
In currencies, the dollar was marginally softer but not drifting too far below recent milestone highs as uncertainty continues to swirl around the rates and economic outlook.
The euro bought $1.0237 and the yen steadied at 136.34 per dollar. The US dollar index, which touched a 20-year high this month, was down slightly to 106.300.
Oil prices rose on expectations Russia's reduction in natural gas supply to Europe could encourage a switch to crude, with Brent futures last up 1% at $106.17 a barrel and US crude up 0.7% to $97.37 a barrel.
Benchmark 10-year Treasury yields fell 3.5 bps to 3.7850% as growth worries gave support to bonds.
Gold hovered at $1,725 an ounce and bitcoin nursed overnight losses at $21,100.