Asian shares fell today, Tuesday, as investors adopted a cautious stance ahead of the Federal Reserve's impending decision on interest rates. Japan's Nikkei 225 dropped 1.1% to 33,177.75 in morning trading, while Australia's S&P/ASX 200 lost 0.5% to 7,192.40. South Korea's Kospi edged down 0.3% to 2,568.12, and Hong Kong's Hang Seng slipped 0.5% to 17,835.44. The Shanghai Composite also fell by 0.3% to 3,116.98.

"Market sentiments remained in its usual wait-and-see ahead of the Federal Open Market Committee meeting this week,” said Yeap Jun Rong, a market analyst at IG.

In contrast, Monday saw marginal gains on Wall Street with the S&P 500 edging up 0.1% to 4,453.53 and the Dow Jones Industrial Average rising less than 0.1% to 34,624,30. The Nasdaq composite also added less than 0.1% to reach 13,710.24.

Traders are currently focusing on the Fed's meeting this week with predictions suggesting a roughly 40% chance that rates will be raised again in either November or December according to data from CME Group (NASDAQ:CME).

Investors are also keenly watching for signals about next year when they anticipate the Fed might begin cutting interest rates – a move that typically loosens financial conditions and boosts markets.

However, concerns remain that rates may need to stay higher for longer to bring inflation down to the Fed's 2% target amid a recent spike in oil prices.

Speculation about a possible recession continues despite reports showing resilience in the economy and job market. One concern is the unusual occurrence of two-year and other shorter-term bond yields remaining higher than longer-term yields, an indicator that has often preceded recessions in the past.

Another warning signal comes from the leading economic indicators index, which monitors factors such as new orders for manufacturers and consumer expectations for business conditions. According to Doug Ramsey, chief investment officer of The Leuthold Group, a contraction of 3% or more in its six-month annualized rate-of-change has always been associated with a recession.

In other market news, Clorox (NYSE:CLX) shares dropped 2.4% after the company reported a cybersecurity attack causing widespread disruptions to its business. Also, Ford (NYSE:F) and General Motors (NYSE:GM) saw their stocks decline as a limited strike by the United Auto Workers extended into another day. Ford fell 2.1%, and General Motors slipped 1.8%.

Meanwhile, energy producers' stocks led the market due to rising oil prices. Exxon Mobil (NYSE:XOM) gained 0.8%, and Marathon Petroleum (NYSE:MPC) rose 1.6%.