Cautious Markets Amid Interest Rate Speculations and Diplomatic Tensions

Asia's stock markets start the week cautiously as traders anticipate corporate earnings and crucial U.S. data release. Diplomatic spats and interest rate outlook weigh on stocks, with Japan's economy contracting and China advising against travel to Japan. Analysts predict volatile market conditions as economic data unfolds.

Asia's stock markets adopted a cautious stance on Monday, bracing for a week of corporate earnings and key U.S. data releases. Traders remain focused on interest rate outlooks and the recent rally in artificial intelligence stocks amid changing market expectations.

Uncertainty among policymakers has reduced the likelihood of a U.S. rate cut in December, leading to downward pressure on stocks. The S&P 500 futures showed a slight increase, whereas Japan's tourism and retail stocks fell due to diplomatic tensions with China. In Australia, BHP's legal challenges contributed to a market dip.

Amid these challenges, market eyes are on upcoming U.S. corporate earnings, particularly from chipmaker Nvidia, as analysts gauge the impact on the tech sector. Concurrently, concerns about Japan's fiscal policies and economic contraction add another layer of tension, illustrating a fraught global economic landscape.

(With inputs from agencies.)