On Tuesday, Asian stock markets experienced a downturn as global investors assessed the potential repercussions of a slowing U.S. economy. Concerns stem from a decline in manufacturing activity and a deceleration in the U.S. economic recovery.

The broadest MSCI index of Asia-Pacific shares outside Japan dipped by 0.1%. Despite the slight drop, the index has risen by 1.6% this month.

Australian stocks fell by 0.21%, while Japan's Nikkei index declined by 0.77%. China’s CSI300 index dropped by 0.16%, and Hong Kong's Hang Seng index remained unchanged at the start of trading.

Yields on benchmark 10-year U.S. Treasury notes fell to 4.4001%, down from a previous close of 4.402%. The yield on two-year notes, which are more sensitive to trader expectations regarding changes in Federal Reserve rates, was at 4.8184%.

In Monday's session, yields on U.S. Treasury bonds hit a two-week low following a decline in manufacturing activity for the second consecutive month. Yields on two-year bonds dropped by 6 basis points, and ten-year bond yields fell by 11 basis points, reflecting concerns over the weakening economic strength of the U.S.

Financial markets are anticipating a potential cut in the Federal Reserve's rates by 40 basis points by the end of 2024. In Europe, investors are expecting the European Central Bank to reduce its benchmark rate by 25 basis points to 3.75% on Thursday.