Asian markets diverged Thursday after minutes from the Federal Reserve's most recent policy meeting indicated officials would keep interest rates elevated for some time as they struggle to bring inflation down to target.
The news, however, was offset slightly by forecast-busting earnings from US tech titan Nvidia that showed profits and revenue soaring.
Regional equities have taken a breather after a recent rally as data indicating inflation easing and the jobs market softening fanned hopes the US central bank will begin cutting borrowing costs by September.
However, warnings from a number of decision-makers that they wanted to see more evidence that prices were under control have caused some dealers to rethink.
And confidence took another blow Wednesday when minutes from the Fed's April-May meeting showed policymakers were frustrated with the slow progress in bringing inflation down to their two percent goal.
Consumer price readings above expectations from January to March led them to conclude "it would take longer than previously anticipated" to be confident they were winning their battle, the minutes showed.
They talked about keeping rates at a two-decade high for an extended period "should inflation not show signs of moving sustainably toward two percent or reducing policy restraint in the event of an unexpected weakening in labour market conditions".
Board members also "mentioned a willingness to tighten policy further should risks to inflation materialise in a way that such an action became appropriate", the Fed added.
The minutes "were taken as a little more hawkish than anticipated but were broadly aligned with the recent messaging from Fed officials with generally broad acceptance of the wait and see approach", said National Australia Bank's Taylor Nugent.
And HSBC's Ryan Wang added: "It is clear... that the policymakers have a range of views about inflation. Overall, the minutes show that data had not increased the confidence of policymakers."
All three main indexes on Wall Street fell.
Asian markets were mixed, with Hong Kong extending losses to a third successive day, having rallied in recent weeks to levels not seen since August, while Shanghai, Sydney and Seoul were also in the red.
But Tokyo, Singapore, Wellington, Taipei and Manila all rose.
There was some support from Nvidia's results, which showed it turned a profit of $14.9 billion in the first quarter -- seven times what it made the year before, as revenue quadrupled to $26 billion.
It also said second-quarter revenue would hit around $28 billion, which was also above expectations, while also announcing a 10-for-1 stock split and a 150 percent bump in its quarterly dividend.
Traders had been keenly awaiting the release as it was seen as a guide to overall market sentiment, with its high-end processors prized by firms looking to get ahead in the booming artificial intelligence sector.
US futures all rose.
The prospect of US rates being held higher for longer put fresh pressure on oil prices, which fell again Thursday, having hit a three-month low Wednesday on data showing US stockpiles jumped last week.
And gold, which hit a new record $2,450 earlier in the week on rate-cut bets, dropped back to around $2,375.
Tokyo - Nikkei 225: DOWN 0.8 percent at 38,913.48 (break)
Hong Kong - Hang Seng Index: DOWN 1.6 percent at 18,884.29
Shanghai - Composite: DOWN 0.9 percent at 3,129.93
Dollar/yen: UP at 156.78 yen from 156.75 yen on Wednesday
Euro/dollar: UP at $1.0828 from $1.0826
Pound/dollar: UP at $1.2721 from $1.2717
Euro/pound: UP at 85.11 from 85.10 pence
West Texas Intermediate: DOWN 0.8 percent at $76.95 per barrel
Brent North Sea Crude: DOWN 0.7 percent at $81.34 per barrel
New York - Dow: DOWN 0.5 percent at 39,671.04 (close)
London - FTSE 100: DOWN 0.6 percent at 8,370.33 (close)
