Asian equity markets were poised to open lower Wednesday following declines in the US, with investors growing cautious ahead of the Federal Reserve chief’s congressional testimony. The dollar rose with Treasuries in a sign of demand for havens.

Futures declined for benchmarks in Japan, Hong Kong and Australia. The S&P 500 notched its first back-to-back losses in nearly four weeks Tuesday as trading resumed after a long holiday weekend. US-listed Chinese stocks suffered their biggest decline in three months.

In extended US trading, economic bellwether FedEx Corp. tumbled after its 2024 outlook fell short of analyst consensus estimates on weakened demand.

Treasuries rose following gains in Europe, with gilt yields leading the drop ahead of inflation data Wednesday. The dollar advanced against all of its Group-of-10 counterparts except the yen.

Investors caught between fear of missing out and concerns markets have run too far, too fast are contending with overblown valuations and hawkish signals from the Fed. Bullish positioning in US equity futures grew last week, taking it to the most extended levels for the S&P 500 and Nasdaq 100 in data going back to 2010, according to Citigroup strategists.

Fed Chair Jerome Powell is scheduled to give his semi-annual report to Congress on Wednesday, with Bloomberg Intelligence expecting a hawkish tone. While the policymakers kept interest rates unchanged at their meeting last week, they forecast rates may reach 5.6% in 2023, implying around two additional quarter-point rate hikes or one half-point increase. That contrasts with market pricing slightly more 20 basis points of hikes in the remainder of the year.

Data Tuesday showed US housing starts unexpectedly surged in May by the most since 2016 and applications to build increased, suggesting home construction is on track to help fuel economic growth.

“Our skepticism around the sustainability of the rally in US market-cap weighted indexes stems primarily from continued investor belief that the Fed is bluffing on holding rates higher for longer,” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, wrote in a note. “If a favorable soft landing does materialize, the Fed will have no incentive to cut rates, especially if labor markets are still relatively resilient.”

The Nasdaq Golden Dragon China Index fell almost 5% on Tuesday, following a two-day 3.7% drop in the Hang Seng Tech index after the State Council failed to issue specific support measures and banks offered modest rate cuts. Elsewhere, oil retreated, with global benchmark Brent settling below $76 a barrel, amid broader risk-off sentiment.

Key events this week:

• Federal Reserve Chair Jerome Powell delivers semi-annual congressional testimony before the House Financial Services Committee, Wednesday
• Chicago Fed President Austan Goolsbee speaks, Wednesday
• Eurozone consumer confidence, Thursday
• Rate decisions in UK, Switzerland, Indonesia, Norway, Mexico, Philippines, Turkey, Thursday
• US Conference Board leading index, initial jobless claims, current account, existing home sales, Thursday
• Fed’s Powell delivers testimony before the Senate Banking Committee, Thursday
• Cleveland Fed’s Loretta Mester speaks Thursday
• Eurozone S&P Global Eurozone Manufacturing PMI, S&P Global Eurozone Services PMI, Friday
• Japan CPI, Friday
• US S&P Global Manufacturing PMI, Friday
• St. Louis Fed President James Bullard speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 8:03 a.m. Tokyo time. The S&P 500 fell 0.5%
• Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.1%
• Nikkei 225 futures fell 0.7%
• Australia’s S&P/ASX 200 Index futures fell 0.4%
• Hang Seng Index futures fell 1.2%

Currencies

• The euro was little changed at $1.0919
• The Japanese yen was little changed at 141.39 per dollar
• The offshore yuan was little changed at 7.1819 per dollar
• The Australian dollar was little changed at $0.6788

Cryptocurrencies

• Bitcoin fell 0.2% to $28,126.39
• Ether fell 0.4% to $1,777.74

Bonds

• The yield on 10-year Treasuries declined four basis points to 3.72%

Commodities

• West Texas Intermediate crude fell 0.5% to $70.84 a barrel

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Cristin Flanagan.