Wall Street is poised to open lower on Tuesday as a possible visit by US House Speaker Nancy Pelosi to Taiwan prompted threats from Beijing.
Futures for the Dow Jones industrials fell 0.5 per cent and futures for the S and P 500 declined 0.6 per cent.
China sees Taiwan as its own territory and has repeatedly warned of "serious consequences" if the reported trip to the island democracy goes ahead.
Pelosi has said she is visiting Singapore, Malaysia, South Korea and Japan for talks on a variety of topics, including trade, COVID-19, climate change and security.
While there have been no official announcements, local media in Taiwan reported Pelosi will arrive on Tuesday night, making her the highest-ranking elected US official to visit in more than 25 years.
"The first big relief point will be Pelosi's safe arrival in Taiwan, followed by her safe departure," said Stephen Innes, managing partner at SPI Asset Management.
"No party wants a real war, but the risk of mishap or even aggressive war game escalation is real, which could always lead to a tactical mistake."
In Asian trading, Japan's benchmark Nikkei 225 declined 1.4 per cent to 27,594.73.
South Korea's Kospi slipped 0.5 per cent to 2,439.62. Hong Kong's Hang Seng dropped 2.4 per cent to 19,689.21, while the Shanghai Composite dove 2.3 per cent to 3,186.27.
Australia's S and P/ASX 200 edged 0.1 per cent higher to 6,998.10.
The Reserve Bank of Australia on Tuesday boosted its benchmark interest rate for a fourth consecutive month to a six-year high of 1.85 per cent.
It was the third consecutive hike of half a percentage point. When the central bank lifted the rate by a quarter percentage point at its monthly board meeting in May, it was the first rate hike in more than 11 years.
The cash rate is now at its highest point since May 2016 when the bank cut the rate from to 1.75 per cent from 2 per cent.