On Tuesday, Asian shares fell as financial markets worried about lingering global cost pressures. Investors turned their attention this week to US inflation data and the prospect of further sharp interest rate hikes by the Federal Reserve.

The priorities of lowering inflation to support expanded domestic demand and sustainable job growth will be loud and clear at the Jackson Hole Symposium on August 25-27. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2% in early Asian trade. The index is up 0.5% so far this month. US stock futures rose 0.07%.

Japan’s Nikkei lost 0.81%, while Australian shares were flat. China’s blue-chip CSI 300 index fell 0.31% in early trade. Hong Kong’s Hang Seng Index opened 0.12% lower.

The Fed saw some encouraging signs on the price front, with a New York Fed survey on Monday showing a sharp drop in consumer inflation expectations in July. The Dow Jones Industrial Average gained 0.09%, the S&P 500 lost 0.12%, and the Nasdaq Composite lost 0.1%. There was also safe-haven buying in bonds as China held several days of military exercises in Taiwan, unsettled by Beijing’s military attack on Taiwan.

The yield on the benchmark 10-year US Treasury note rose to 2.7517% from Monday’s US close of 2.763%. The two-year yield hit 3.2115% and ended at 3.216% in the US, as traders’ expectations of a hike in the federal funds rate increased.

The dollar index, which tracks the greenback against a basket of other major trading partners, rose to 106.37. After their worst week since April, oil prices extended their pullback recently amid fears that global demand will stagnate as central banks continue to tighten policy. US crude fell 0.19% to $90.59 a barrel. Brent crude fell to $96.48 a barrel.

The dollar’s gains were a setback for gold, although it managed to bounce back from Friday’s lows and trade at $1,788.7731 an ounce.