Asian equities recovered slightly on Tuesday, following a strong rally on Wall Street, though gains were tempered by ongoing concerns about China's economic health.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2%, partially offsetting Monday's 1.11% decline, while Japan's Nikkei advanced 0.4%, buoyed by strength in financial and consumer sectors.
Investors are now focused on the upcoming U.S. inflation data, set for release on Wednesday. Economists anticipate a further slowdown to an annual rate of 2.6% for August.
The Federal Reserve is widely expected to ease interest rates at its meeting next week, with markets currently pricing in a 29% chance of a 50-basis-point cut. A total of 110bps worth of cuts are anticipated by year-end.
U.S. stock futures showed mixed performance on Tuesday, with S&P 500 futures edging up 0.02% while Nasdaq futures dipped 0.07%.
In Europe, EUROSTOXX 50 futures gained 0.23%, while FTSE futures slipped 0.16%.
Meanwhile, China's economic struggles continued to cast a shadow over Asian markets, as recent data showed accelerating consumer inflation but weak domestic demand and worsening producer price deflation.
Chinese stocks hit seven-month lows, and the yuan faced pressure amid calls for further stimulus.
Adding to China's challenges, trade tensions with the U.S. escalated after the House of Representatives passed a bill to restrict business with Chinese biotech firms on national security grounds.