Asian stocks extended lower, alerting to higher yields on US Treasuries.

The global sell-off in equities continued in Asia on Wednesday after US Treasury yields rose, as the prospect of the Federal Reserve’s tightening to combat high inflation weighed on markets.

Shares fell in Japan, Australia and South Korea. US futures tumbled after the S&P 500 (SPX) fell broadly and the high-tech Nasdaq 100 (NDX) index fell 2.6%.

Treasuries have stalled amid speculation that the Federal Reserve may decide to raise interest rates in March by more than a quarter of a percentage point. Bonds fell in Australia and New Zealand. The dollar index maintained gains.

Oil continued to rise, underlining pressures on global prices, after an explosion hit a pipeline extending from Iraq to Turkey, halting vital supplies.

In China, where policy differs from the United States, the central bank pledged to use more monetary policy tools to help the economy and ease credit pressures amid the housing slump. Hong Kong stock futures earlier indicated a quiet open.

Global stocks had a volatile start to the year, weighed down by a more aggressive stance from the Federal Reserve, economic turmoil from the omicron variant of the coronavirus that causes Covid-19, and risks to corporate earnings from rising costs. Higher bond yields are forcing investors to rethink the valuations of a group of assets.

“Overall, we expect to see that the bond market will drive broader volatility in equity and other markets as well,” Winnie Cesar, chief global strategy officer at CreditSights, told Bloomberg TV.

She added that she is somewhat concerned about corporate earnings for the fourth quarter and first half of 2022, because they may miss higher expectations.

Federal Reserve forecast

The latest US data showed that a gauge of manufacturing in New York State declined in January, suggesting that Omicron caused activity to decline.

The question that investors suffer the most is whether the Federal Reserve will need to tighten monetary policy to steer inflation lower, or whether weakness in economic growth will allow the central bank to be less severe in tightening, According to Dennis DeBusschere, founder of 22V Research. He said the former would be “terrible” for cyclical and technology stocks.

In corporate news, Microsoft Corp. fell after it revealed a $69 billion deal for Activision Blizzard Inc. , as lower-than-expected fourth-quarter trading income impacted Goldman Sachs Group Inc. on the banks. Alibaba Group Holdings Limited in the United States backed down after a report that Washington is reviewing its cloud business to see if it poses a national security risk.

Some of the main events to watch this week:

-Morgan Stanley, Bank of America, UnitedHealth Group and Netflix are among the companies that will release their earnings report during the week.

US data includes housing starts on Wednesday and jobless claims on Thursday

– Interest rate decisions from countries including Indonesia, Malaysia, Norway, Turkey and Ukraine on Thursday

– Crude Oil Inventory Report, Thursday

Stock market:

– S&P 500 futures were flat at 9:11 am in Tokyo. The S&P 500 fell 1.8%.

The futures contracts on the Nasdaq 100 have changed slightly. The Nasdaq 100 is down 2.6%.

Japan’s Topix index fell 1.4%.

– Australia’s S&P/ASX 200 Index is down 0.9%

South Korea’s Kospi index fell 0.8%.

– Hang Seng futures rose 0.2% from

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