Australian shares are expected to drop at Tuesday's open following a volatile trading session in the U.S. that saw the S&P 500 and Dow reset record highs.
As of 7 am AEST, the ASX futures were down 32 points, or 0.4%.
In a speech released early this morning, Federal Reserve Chairman Jerome Powell reaffirmed his confidence in the U.S. economy, describing it as "strong overall." He highlighted "solid" labour market conditions and indicated that policymakers are growing more confident that inflation is on track to reach the 2% target.
"Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset course. The risks are two-sided, and we will continue to make our decisions meeting by meeting," Powell said.
Ahead in the session, local retail sales data for August will be released, with economists forecasting a 0.4% increase following flat sales in July. The Judo Bank manufacturing PMI will also be closely monitored.
On the bond markets, 10-year rates were at 3.976% while 2-year yields were at 3.617%.