An Asian equity gauge snapped a two-day decline while contracts for US equities slipped after both the S&P 500 and the Nasdaq 100 rose on Monday. Rio Tinto Plc climbed the most in a month following a report which showed the miner recorded a higher-than-expected increase in copper production for the third quarter. 

Gold fell for a second day while a gauge of the dollar traded in a narrow range. Haven bids have eased as investors monitor ongoing efforts to defuse tensions in the Middle East. 

US President Joe Biden is set to visit Israel as part of a push to prevent the war from spreading. Secretary of State Antony Blinken also returned to Israel to meet Prime Minister Benjamin Netanyahu, after talks with Arab governments. Russian President Vladimir Putin held a call with the leaders of Egypt, Syria, Iran and the Palestinian Authority, and the Kremlin said there was a “unanimous opinion” on the need for a cease-fire. He spoke separately with Netanyahu.

Treasury yields edged higher in the Asian morning session after those on the 10-year yield climbed nine basis points to 4.7% on Monday.

The Middle East conflict “has added to the upside risks to oil prices and downside risks to shares in the near term”, Shane Oliver, the head of investment strategy at AMP, wrote in a note. Still, “if Iran stays out of the conflict and a major supply disruption is avoided, the impact on shares on a 12-month view should be minimal.”

Country Garden Holdings is also on the radar as the clock is ticking for the distressed developer to pay interest on a dollar bond. The builder, which has become a symbol of China’s broader property debt crisis, must pay a $15.4-million coupon by the end of a 30-day grace period on 17 -18 October before a default can be called. The company’s shares rose as much as 4.1% on Tuesday.

Another key focus in Asia is China’s Belt and Road forum, which Russia’s Putin is expected to attend.

Eyes on earnings

Aside from geopolitics, traders will also be focused on corporate results this week. The outlook for earnings is weakening and could remain subdued, according to strategists from Morgan Stanley to JPMorgan Chase & Co.

As the reporting season kicks off, Morgan Stanley’s Michael Wilson said earnings revisions breadth — referring to the number of stocks seeing upgrades versus downgrades — for the S&P 500 has fallen sharply over the past couple of weeks. Citigroup Inc.’s index of earnings revisions shows downgrades have outpaced upgrades for four straight weeks ahead of the reporting season. JPMorgan strategist Mislav Matejka expects this to continue.

Investors looking to earnings season for a dose of good news are hanging their hopes on a familiar group: Big Tech.

The five biggest companies in the S&P 500 — Apple, Microsoft, Alphabet, Amazon.com and Nvidia — account for about a quarter of the benchmark’s market capitalization. Their earnings are projected to jump 34% from a year earlier on average, according to analyst estimates compiled by Bloomberg Intelligence. 

In economic news, a measure of New York state factory activity contracted in October, reflecting a pullback in demand. Federal Reserve Bank of Philadelphia president Patrick Harker repeated comments he made last week asserting the central bank can hold its benchmark rate steady as long as there is not a sharp turn in the economic data.

Elsewhere, Bitcoin edged lower after surging as much as 10% as BlackRock Inc. said its application for an exchange-traded fund that invests directly in the cryptocurrency is still under review.