Asian markets fell again Tuesday and the dollar held gains as traders grow increasingly worried that the Federal Reserve will continue to ramp up interest rates to fight inflation.

With the Jackson Hole symposium of central bankers and finance chiefs taking place this week, the focus is on what Fed chief Jerome Powell says about its plans to tackle prices, with many fearing officials could send the economy into recession.

The equities' losses appear to mark the end of a near-two-month rally from June lows, which was powered by signs of economic weakness that observers hoped would allow the bank to be less hawkish.

"Investors are becoming increasingly concerned that Jerome Powell will deliver a hawkish speech at Jackson hole, whilst warning that the coming months will be hard to navigate (and fan fears of a recession)," said Matthew Simpson at SoneX Financial.

"Public comments from various Fed members have become increasingly hawkish as they seemingly read from the same script ahead of Jackson Hole - which is an event typically associated with important Fed announcements."

Bets that the central bank will keep lifting rates for some time have sent 10-year Treasury yields higher and ramped up fears of a contraction in the world's number one economy.

But the United States is not the only economy under pressure, with governments and banks around the world facing an uphill battle against inflation, which is at multi-decade highs owing to spiking energy costs and supply chain snarls.

That comes as uncertainty rules owing to the ongoing war in Ukraine and a sharp slowdown in China caused by lockdowns put in place as part of the country's zero-Covid strategy.

Wall Street fell deep into the red with the S&P 500 and Nasdaq off more than two percent each.

And Asia followed suit.

Hong Kong and Shanghai dropped as investors brushed off a loan rate cut by the People's Bank of China, which also called for banks to lend more to help the battered property market.

Tokyo, Sydney, Seoul, Singapore, Taipei, Manila and Wellington were also down.

The dollar held its strength on rate hike expectations, with 24-year highs against the yen and two-decade highs against the euro, having broken parity with the single currency.

The euro has been hammered for months by recession expectations as it is hit by an energy crisis caused by sanctions on Russia for its invasion of Ukraine.

Fears have increased after Russia's Gazprom said Friday that the Nord Stream pipeline would be closed for maintenance at the end of the month, cutting Europe's crucial gas deliveries.

Oil prices -- which have fallen for weeks as recession worries hit demand expectations -- bounced after Saudi Arabia suggested OPEC and other major producers could cut output citing "volatility" on crude markets.

Such a move would deal a blow to the fight against inflation and could offset the possible flow of Iranian oil if a deal is struck on Tehran's nuclear programme.

Tokyo - Nikkei 225: DOWN 1.2 percent at 28,456.92 (break)

Hong Kong - Hang Seng Index: DOWN 0.5 percent at 19,552.76

Shanghai - Composite: DOWN 0.2 percent at 3,270.21

Euro/dollar: UP at $0.9942 from $0.9941 Monday

Pound/dollar: UP at $1.1772 from $1.1763

Euro/pound: DOWN at 84.45 pence from 84.51 pence

Dollar/yen: DOWN at 137.13 yen from 137.48 yen

West Texas Intermediate: UP 0.8 percent at $91.11 per barrel

Brent North Sea crude: UP 0.8 percent at $97.26

New York - Dow: DOWN 1.9 percent at 33,063.61 (close)

London - FTSE 100: DOWN 0.2 percent at 7,533.79 (close)